'Real' trading in U.S. markets is down to 16 percent; the rest is machines

Section:

'Real' Investors Eclipsed by Fast Trading

By Telis Demos
Financial Times, London
Tuesday, April 24, 2012

http://www.ft.com/intl/cms/s/0/da5d033c-8e1c-11e1-bf8f-00144feab49a.html

NEW YORK -- Trading by "real" investors is taking up the smallest share of US stock market volumes in more than a decade, according to a recent study.

The findings highlight how US trading activity is increasingly being fuelled by fast turnover of shares by independent firms and the market-making desks of brokerages, many using high-frequency trading engines.

Though many argue that such trading lowers costs by narrowing spreads, critics insist that it makes it more difficult for institutional investors to trade larger positions, in turn fuelling a rise in the use of off-exchange "dark pools" and more complex algorithmic trading techniques.

... Dispatch continues below ...



ADVERTISEMENT

Golden Phoenix Discusses Royalty Mining Growth Strategy
on '21st Century Business' on Fox Business Network

Golden Phoenix Minerals Inc. has discussed its royalty mining growth strategy on the Fox Business Network program "21st Century Business" with host Jackie Bales. Golden Phoenix's director of corporate communications, Robert Ian, told how the company narrows its focus to project generation and future royalty streams. He explained why Golden Phoenix believes it's better to own joint-venture interests in several producing mines instead of full exposure to just one project.

"21st Century Business" has been airing for 15 years. Previous hosts have included Gen. Alexander Haig, Gen.l Norman Schwarzkopf, and Secretary of Defense Caspar Weinberger. Golden Phoenix appeared as paid programming on this broadcast.

To view the program with Golden Phoenix, please visit Golden Phoenix's Internet site here:

http://www.goldenphoenix.us/company-videos.html



The proportion of US trading activity represented by buy and sell orders from mutual funds, hedge funds, pensions, and brokerages, referred to as "real money" or institutional investors, accounted for just 16 per cent of total market volume in the form of buying, and 13 per cent via selling in the final quarter of last year, according to analysis by Morgan Stanley's Quantitative and Derivative Strategies group.

That has fallen from an average of 27 per cent for institutional buys from 2001 to 2006, and 20 per cent for sells over the same period. The highs were at the beginning of 2001, as far back as Morgan Stanley's analysis goes, when buys and sells were some 35 per cent and 25 per cent, respectively.

Morgan Stanley's analysts, Charles Crow and Simon Emrich, used 13-F filings, which are public disclosures of position changes by institutions, to measure the proportions.

The analysts said that the data may be clouded by more rapid turnover by institutions, as a result of high market volatility, which does not necessarily show up in data reported at the end of the quarter.

"Matching of 'real' buyers and sellers is more challenging in a market where there are fewer of them," they wrote.

Though overall US trading volumes have risen since 2004, when average daily volumes were some 4 million trades, they have fallen in the past two years from their peak of 12 million at the end of 2009 to about 6 million. The share of stock trading taking place away from US exchanges also hit record levels in the first quarter of this year, at 34 per cent.

* * *

Join GATA here:

Las Vegas Money Show
Caesar's Palace, Las Vegas
Monday-Thursday, May 14-17, 2012
http://www.moneyshow.com/tradeshow/las_vegas/moneyshow/

Committee for Monetary Research and Education
Spring Dinner Meeting
"Money and the Corporate State"
Union League Club, New York, N.Y.
Thursday, May 17, 2012
http://www.cmre.org/

Vancouver World Resource Investment Conference
Sunday-Monday, June 3-4, 2012
Vancouver Convention Centre East
Vancouver, British Columbia, Canada
http://www.cambridgehouse.com/event/world-resource-investment-conference

Standard Chartered's Earth Resources Conference
Wednesday-Thursday, June 20-21, 2012
J.W. Marriott, Hong Kong
http://www.standardcharteredsignatureevents.com/earths-resources/welcome...

Hong Kong Gold Investment Forum
Monday-Wednesday, June 25-27, 2012
Renaissance Harbour View Hotel, Hong Kong
http://www.hkgoldinvestmentforum.com/

New Orleans Investment Conference
Wednesday-Saturday, October 24-27, 2012
Hilton New Orleans Riverside Hotel
New Orleans, Louisiana
http://www.neworleansconference.com/

* * *

Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16



ADVERTISEMENT

Be Part of a Chance to Discover
Multi-Million-Ounce Gold and Silver Deposits in Canada

Northaven Resources Corp. (TSX-V:NTV) is advancing five gold and silver projects in highly prospective and politically stable British Columbia, Canada.

Check out the exploration program on our Allco gold/silver project :

-- A large (13,000 hectare) property, covering more than 15 square kilometers of a regional mineralized trend just 3km from a recently announced 1.2-million-ounce gold and 15-million-ounce silver deposit.

-- The property hosts historic high-grade silver workings and many mineral showings as well as former mines at the property's northern and southern boundaries.

-- A deep-penetrating airborne geophysics survey has just been completed on the entire property and neighboring deposits and its results are eagerly awaited.

To learn more about the Allco property or Northaven's other gold and silver projects, please visit:

http://www.northavenresources.com

Or call Northaven CEO Allen Leschert at 604-696-3600.