Seeking Alpha

Algo Trading Dominates 80% Of Stock Market

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Includes: QQQ, SPY
by: Real Finance
Real Finance
Long only, value, biotech, Growth
Summary

80% of the daily moves in U.S. stocks are machine-led.

Machines are causing sharp drops and rallies based on immediate data releases.

Over the last few years, the impact from algo trading has become more visible, especially in 2018.

In the early 2000s, algo trading only consisted of ~15% of market volume in the U.S. stock market. However, algo trading is now used in most large institutional firms and commands 80% of the U.S. market (SPY DJIA QQQ)

Please watch the below video to learn more:

  • Rise in machine trading - benefits and cons.
  • Day traders are put to the test as algo trading continues to rise in popularity.
  • Long-term investors may stand a better chance as algos are focused more on extreme short term (microseconds or minutes).

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.