<p>I was looking at the market (DOW) performance today and noticed an oddity:  Beginning late in 2016 trading activity roughly tripled.  The change was sudden and remarkably consistent.  What would cause such a marked change in market behavior?<a href="https://i.sstatic.net/ODkfz.jpg" rel="nofollow noreferrer"><img src="https://i.sstatic.net/ODkfz.jpg" alt="Source http://money.cnn.com/data/markets/dow/"></a></p>

<p>Source: <a href="http://money.cnn.com/data/markets/dow/" rel="nofollow noreferrer">http://money.cnn.com/data/markets/dow/</a></p>

<p>I'll note that Yahoo displays essentially the same phenomenon, so it's not just something wonky with CNN:</p>

<p><a href="https://i.sstatic.net/ghDH5.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/ghDH5.png" alt="enter image description here"></a> </p>

<p>Source: <a href="https://finance.yahoo.com/" rel="nofollow noreferrer">https://finance.yahoo.com/</a></p>

<p>While the NASDAQ doesn't show this effect, the S&amp;P 500 does:</p>

<p><a href="https://i.sstatic.net/aL1Xg.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/aL1Xg.png" alt="enter image description here"></a></p>

<p>Source: <a href="http://money.cnn.com/data/markets/sandp/" rel="nofollow noreferrer">http://money.cnn.com/data/markets/sandp/</a></p>

CC BY-SA 3.0
2018-02-06T05:20:10.927Z
That is interesting.  It looks like manipulation, but at that scale, it is unlikely to be because of the transaction costs.  This much volume if it were market neutral, would cause the bid-ask spread to substantially narrow.  That alone would cause the market price to rise.  Price is partially a function of liquidity.
Dave Harris
CC BY-SA 3.0
2018-02-06T11:52:59.890Z
The Dow is a small index, so it may not be the best measure to look at. Also, most traffic on the exchange is now algorithmic trading, most of which does not result in a transaction. Anything that causes some of that activity to show up as trading volume would cause volume to jump. The quant finance stack exchange is probably the best place to ask this.
Brian Romanchuk
CC BY-SA 3.0
2018-02-06T18:58:44.963Z
@BrianRomanchuk - But it's hard to conceive of some sort of change in trading practices that would be both so sudden and so persistent.
Hot Licks
CC BY-SA 3.0
2018-02-06T20:30:26.113Z
@Hot Licks, The definition of what constitutes a “trade” may have changed (in particular, a new trading platform added to the data source), or else algorithmic trading style changed. I last looked at this years ago, and over 99% of trading activity was algos moving around bid/offers even then. There is no comparison of the current market microstructure to that of 20 years ago.
Brian Romanchuk
CC BY-SA 3.0
2018-02-11T13:28:05.023Z
@BrianRomanchuk - I wasn't comparing to 20 years ago, only about a year and a half ago.
Hot Licks
CC BY-SA 3.0
2018-02-11T23:28:03.500Z
If anyone wants to pursue this, you should look at the individual component companies. If volume truly changed, it would have to show up in the components. There could have been splits that affect volume #’s, or changes in index composition. The quantitative finance stack exchange is probably a better forum.
Brian Romanchuk
<stock-market>
What caused the increased market trading since late 2016?
Hot Licks
# What caused the increased market trading since late 2016?

(Asked by: username_0 on 2018-02-06)

I was looking at the market (DOW) performance today and noticed an oddity: Beginning late in 2016 trading activity roughly tripled. The change was sudden and remarkably consistent. What would cause such a marked change in market behavior?[![Source http://money.cnn.com/data/markets/dow/](https://i.sstatic.net/ODkfz.jpg)](https://i.sstatic.net/ODkfz.jpg)

Source: <http://money.cnn.com/data/markets/dow/>

I'll note that Yahoo displays essentially the same phenomenon, so it's not just something wonky with CNN:

[![enter image description here](https://i.sstatic.net/ghDH5.png)](https://i.sstatic.net/ghDH5.png)

Source: <https://finance.yahoo.com/>

While the NASDAQ doesn't show this effect, the S&P 500 does:

[![enter image description here](https://i.sstatic.net/aL1Xg.png)](https://i.sstatic.net/aL1Xg.png)

Source: <http://money.cnn.com/data/markets/sandp/>

**Tags:** stock-market

> **Comments:**
> **username_1**: That is interesting.  It looks like manipulation, but at that scale, it is unlikely to be because of the transaction costs.  This much volume if it were market neutral, would cause the bid-ask spread to substantially narrow.  That alone would cause the market price to rise.  Price is partially a function of liquidity.  
> **username_2**: The Dow is a small index, so it may not be the best measure to look at. Also, most traffic on the exchange is now algorithmic trading, most of which does not result in a transaction. Anything that causes some of that activity to show up as trading volume would cause volume to jump. The quant finance stack exchange is probably the best place to ask this.  
> **username_0**: @username_2 - But it's hard to conceive of some sort of change in trading practices that would be both so sudden and so persistent.  
> **username_2**: @username_0, The definition of what constitutes a “trade” may have changed (in particular, a new trading platform added to the data source), or else algorithmic trading style changed. I last looked at this years ago, and over 99% of trading activity was algos moving around bid/offers even then. There is no comparison of the current market microstructure to that of 20 years ago.  
> **username_0**: @username_2 - I wasn't comparing to 20 years ago, only about a year and a half ago.  
> **username_2**: If anyone wants to pursue this, you should look at the individual component companies. If volume truly changed, it would have to show up in the components. There could have been splits that affect volume #’s, or changes in index composition. The quantitative finance stack exchange is probably a better forum.  

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## 0 answers

