Algo Trading Dominates 80% Of Stock Market
Real Finance
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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).
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