Last year, several new records were set, and today, we take a look at some of the top trading trends since 2024.
Markets rally for new all-time high
As the interest rates fell, markets around the world ralled. Last year, there was a good year for stock investors in many countries, the new all-time high was hit in the markets, including the Japanese market, which took more than three decades to overcome the high set in 1990. Was.
But the global markets were also inspired by consumer expenses and recovery of earnings – which were the strongest among companies to spend on Artificial Intelligence (AI) – as we discussed in our recent macro outlook. This helps usually explain the better performance of the NasDaq-100® and the US Large-CAP index.
Chart 1: Global Index held rallies with American big cap
ETF saw record inflow
The US Exchange-Treded Funds (ETF) industry also watched a record inflow in 2024, with the creations to be the first time with more than $ 1 trillion.
Combined with positive returns (as mentioned above), helped to pursue US ETF assets to finish the year with more than $ 10 trillion in AUM.
Most of the new ETFs are active funds
ETF inflows were higher than a double active mutual fund outflow of $ 450 million. However, assuming that an active-to-passing is similar to the change of investment.
As the data suggests, most of the new ETF launch are actively managed portfolio, and the flow in the active ETF is represented by 28% of all ETF flows.
Chart 2: Active ETF dominates new listing and received more than 28% of ETF flow
Not all ETFs keep American stocks
However, you cannot compare it directly with the US Stock Market Capitalization (which can finish the year at about $ 72 trillion).
This is because not all US ETFs have American stock. In fact, the US ETF AUM includes:
- deeply concerned ETFs, which add up to $ 1.8 trillion (or 17.3%).
- International stockWhich add up to $ 1.5 trillion (or 14.8%).
- Commodities and currencies (Including Crypto ETF), which add to $ 286 billion (or 2.75%).
Chart 3: ETP property continues more trend under management
Looking for the most popular ETF
It is also interesting to see that specific ETFs were the most popular in 2024.
In the table below, we look at the ETF that saw the biggest flow and all convert to part of ETF trading (the last two columns in Chart 4). We rank by each of those factors, then sorted by rank below. This shows that investor:
- Were diverse, Stock, bond and currency with strong activity in ETFs.
- Buy us big hatsMost positive net flows in ETF related to Nasdaq-100® or S&P 500.
- Bonds soldMost of the Bond related ETFs with negative net flows.
- New bitcoin rotated in ETFIbit, one of the newly approved bitcoin ETF, the fastest ETF up to $ 50 billion AUM.
Chart 4: Top ETF ranked by trading and flow
The volume jumped again!
Although quarterly versions did not hit the record set during the meme stock craze in 2020, we have seen a frequent increase in volume (ADV) since the initial jump when Kovid began, just after receiving the excitement check to retail investors and The business realized that now the commission was now -free. In Q4 of 2024, Market Wide Advide an average of more than 13 billion shares per day.
Higher advice powered by low priced shares
However, as we see from data, most of the recent growth in the top-rich ADV is due to an increase in the business of sub-$ 1 stock (Green Bar). In fact, his stake of trading ADV has increased continuously since 2017.
Of course, because the prices of these shares are low, they trade too much Shares They trade in business priceIn fact, in Q4 of 2024, sub-$ 1 stock made:
- 16% Volume (Adv) traded.
- Only 0.1% price traded.
Sub-$ 1 shares do different trade. On average, 60% of their trading is off-exchange, and 18% of shares traded “overnight” (just before the market opened).
High Price Stock Advide falling
Interestingly, trade in shares with prices above $ 5 has truly compulsorily unchanged. This is despite the number of high-profile stock division in recent years in shares like AMZN, Goog and NVDA. In fact, we guess that 2024 forward splits have added an additional 479 million shares a day during the year – which means high -priced stock activity is actually falling.
Chart 5: Increased trading market pushes wide volume more in low -priced symbols
Off-exchange trading hit the new record (over 50%)!
Fundament has been increasing for decades. In 2008, the top three exchanges represented about 69% of all equity volumes.
At the same time, the off-exchange market share has increased continuously. Apparently, American markets favor economics fragmentation, and bends towards off-exchange trading. In 2024, off exchange trading was more than 50% of all Adv in a total of 37 days.
The irony is that it was not long ago, that an academic said that the 50% exchange would be a tipping point important for market quality – where there was sufficient competition and encouragement for NBBOs, that NBBO was actually a meaningful benchmark. Protect investors.
Chart 6: Volume Traded Off-Exchange keeps growing despite new exchange entry
Option trading saw even a strong growth
In the last eight years, option has also increased rapidly than trading stock trading. Option volume has increased by 317%compared to stock volume Only 221%went up. One reason for the development of option trading is the increasing use of options in managed portfolio – such as many of ETFs we discussed here with embedded option hedges. Not surprisingly, the composition of option trading over the years has changed as well as ETF options are the most growing.
However, the index option advide has also more than doubled. Many factors can run it, including:
- Increase in demand for comprehensive market hedging.
- Tax benefits of trading index options (which qualify for 60/40 long -term/short -term capital profit tax treatment).
- In addition, the increase of small-dated options that require rolling more often.
Option on NASDAQ-100 Index® (NDX®), AI came into contact with companies, ADVs saw a 39% year-over-year growing in 2024, built on a record year already in 2023.
Chart 7: Option Advice By Inherent
Data shows that retail investors are also an increased part of option trading. Our estimates, some academic studies correspond to those people, showing that retail options Advs increased 13% yoy in 2024, have grown three times more since 2019, and now more than 30% of options make markets.
It is difficult to compare shares and options
Some will say that options now trade more value each day than stock. However, it is a bit misleading.
For a beginning, we have shown that most options trading below 50%delta, meaning that the theoretical impact on the stock market from hedging is below one each.
Also, because the options are finished, traders need to “roll” each quarter, month, or week – just to maintain exposure or hedges – something that we change in open interest (Chart 4 See the manner of). Increasing low-dated weekly options means that expiration trading is more frequent, which has been significantly added to roll and end the expiration dates.
The highest risk for equity in homes in the last 80 years
We have earlier noted that in the long term, stocks perform better than other assets that are including bonds and housing in homes. Therefore, the fact that the data shows that the domestic ownership of shares is at the highest level in more than 80 years, many more Americans must be good to move towards retirement for financial security.
Chart 8: Retail ownership of shares in America is also at high level
American extraordinary continues
The good news is that American stock and option markets keep growing. This helps us grow money in homes and connects their financial freedom. This should help us to provide finance to development and innovation which is helping in the market in 2024.
In turn, investing, employment and promotes the economy.
And it is how efficient market can be good for all.
