Off-exchange trading grows despite three-year equity slump

The proportion of equities traded off-exchange grew throughout 2012 despite a three-year decline in trading volumes of US shares, new data has revealed.

The proportion of equities traded off-exchange grew throughout 2012 despite a three-year decline in trading volumes of US shares, new data has revealed.

Off-exchange trades – both dark and OTC – collated in trade reporting facilities (TRFs) last year reached 32.93% of total US equities volumes, up from 30.40% in 2011, according to institutional broker Rosenblatt Securities.

The rise occurred despite the third consecutive year of generally deceasing US stock volumes, as average daily volumes in 2012 slumped 17.62% compared to 2011 and 33.90% from 2009’s peak of 9.76 billion shares.

The average daily traded value of US shares also fell 16.4% in 2012 year-on-year to US$211.27 million – the first annual drop in two years – although last year’s figure was 29.37% lower than the 2008 high of $299.13 million.

One reason Rosenblatt believes volumes have declined more than values was that during the financial crisis, several large-cap, actively traded stocks issued more shares as their share price decreased.

The data, from Rosenblatt Securities’ monthly US securities volumes report, also showed the first year-on-year decline in options volumes in a decade. In 2012, average daily volume of options slid 12.5% to 14.7 billion – the first decline since 2002.

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