🤖 JPMorgan: 10% of US equity trading is done by traditional investors

JPMorgan: “only about 10 per cent of US equity trading is now done by traditional investors.”

JANUARY 9, 2019

… HFTs dominate the market-making once done by humans in trading pits and the bowels of investment banks. Various quant strategies — ranging from simple ones packaged into passive funds to pricey, complex hedge funds — manage at least $1.5tn, according to Morgan Stanley. JPMorgan estimates that only about 10 per cent of US equity trading is now done by traditional investors. Other markets remain more human, yet are slowly but surely being transformed.

That markets are undergoing a dramatic , algorithmic evolution is an inescapable fact. Although some humbled hedge fund managers may unfairly castigate “algos” for their own failings, there are real risks in how some of these different factors can interact at times of market stress.

HFTs are far more efficient market-makers than human pit traders. Yet the entire sector probably has less capital than just one of the major banks, says Charles Himmelberg, head of global markets research at Goldman Sachs. It means that they tend to adjust their bids aggressively when market mayhem breaks out.


Am I right in saying that the UK has 0.5% stamp duty on all trades, whereas the US has no stamp duty?

Does this mean that there is no high frequency trading in the UK?

Market Makers (i.e. High Frequency Traders) are exempt from Stamp Duty in the UK.

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Thanks, just spent a while reading about that now. Also discovered that there’s a ‘High Growth Segment’ of the LSE main market and these stocks do not have stamp duty.

Is the high growth segment different to AIM? What’s an example of a stock in it, and are retail investors like us exempt from stamp on them too?

It seems really weird, you can read about it here: https://www.londonstockexchange.com/companies-and-advisors/main-market/companies/hgs/hgs.htm

I can’t seem to actually find a listing of any of these stocks on the LSE website! Yes it is different to AIM.

Seems like a bit of a farce, only two companies have listed on it and one moved to the main market after a month! Article about it here, Just Eat was the company, the other is Matomy which I’ve never heard of until now: https://realbusiness.co.uk/we-find-out-why-only-two-companies-have-used-the-lses-high-growth-segment/