US Stock Market is Made of These!
- Thread starter Banjo
- Start date
"If we were to add the number of ETFs and options together, they would represent 67% of all products on the 13F securities list for Q3 2018. In other words, derived products are a MAJORITY of the US STOCK market today.
Whatever this shifting composition – and the total roster of US public companies, specifically – says about the broader economy, the fact that the roster of underlying products is smaller than the list of derived products in this market can’t be healthy...
Let that sink in a moment."
Three thoughts:
☼ More of a reason to work the index stream versus the individual entities. (A bit of self-reinforcement, I realize...)
☼ Really makes the placid market of 2014-2017 seem even more anomalous.
☼ Really suggests that, going forward, market turns will be even more linked -- company-by-company, and country-by-country -- than they are now: volatility WILL return to longer-term norms of 15-20+.
Whatever this shifting composition – and the total roster of US public companies, specifically – says about the broader economy, the fact that the roster of underlying products is smaller than the list of derived products in this market can’t be healthy...
Let that sink in a moment."
Three thoughts:
☼ More of a reason to work the index stream versus the individual entities. (A bit of self-reinforcement, I realize...)
☼ Really makes the placid market of 2014-2017 seem even more anomalous.
☼ Really suggests that, going forward, market turns will be even more linked -- company-by-company, and country-by-country -- than they are now: volatility WILL return to longer-term norms of 15-20+.
sounds like good news for index futures traders
But quite scary, too:
if the fundamental nature of the market is changing, *everyone's* entry/exit rules are now obsolete.
Yowsa.
This is why I like forex
Good stuff, but depending on how you look at it. Many ETFs have no volume, with only 1200 trading over $1M last Friday out of 2900 ETFs listed (total 4900 symbols incl ETFs traded over $1M).
Total dollar-volume was $98B for ETFs vs $367B for all symbols incl ETFs.
So actively traded ETFs make about 25% of all trading. Still a lot though.
Adding options as derivatives is confusing because you can slice it many ways, while people traded options before ETFs, as a different way of betting on single stocks (vs various index-based ETFs).
Total dollar-volume was $98B for ETFs vs $367B for all symbols incl ETFs.
So actively traded ETFs make about 25% of all trading. Still a lot though.
Adding options as derivatives is confusing because you can slice it many ways, while people traded options before ETFs, as a different way of betting on single stocks (vs various index-based ETFs).
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