Investing Article

"Liquidity Smile" Smirks As 25% Of All Volume Now Trades In The Last 30 Mins

04/25/2018 - 1:50pm By: Zero Hedge

What traders refer to as the 'liquidity smile' formed by the pattern of trading volumes has recently become more pronounced and turned it into a 'liquidity smirk'... As The FT's Robin Wigglesworth reports, a seismic shift towards exchange traded funds and other index-tracking investment vehicles has heightened the importance of the last half-hour of the US trading day, from 3.30 to 4pm, when these passive funds typically conduct most of their activity to accurately match their benchmarks. That has prompted traditional active managers to conduct more of their trading during this window to benefit from greater market “liquidity”. Some traders and investors complain that the funnelling of activity into the last half-hour of the day - which comprises nearly a quarter of all US stock trading - is...

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