The NYSE Trading floor partially re-opened on Tuesday, May 26, allowing Floor Brokers an opportunity to resume their business operations (with reduced headcount and restrictions in place to enforce social distancing and other safety protocols).
Floor Brokers have fueled the success of the NYSE Closing Auction, resulting in unrivaled liquidity and execution quality. Investors have swiftly resumed trading with Floor Brokers: D Orders, a flexible order type available only via the Floor, accounted for 30% of total Closing Auction volume on May 27.
As auctions once again include this valuable source of liquidity, we have seen improvement in auction execution quality. NYSE Closing Auctions regularly price stocks near their end-of-day volume-weighted average trading price, and the percentage of Closing Auctions doing so have gone up even further this week with the return of Floor Brokers.
NYSE’s Opening Auction quality has also seen an uptick this week, with the return of the Floor. Given the first minutes of trading after the open are usually the most volatile time of day, auction quality can be measured by how closely the open price tracks in line with subsequent trading. NYSE consistently excels at open pricing, and the Floor’s return has only improved this metric.
The Trading Floor is quickly resuming its critical function in the NYSE Market Model. This will help improve market quality and liquidity, particularly during critical trading events such as the MSCI index rebalances this Friday, May 29.
Multi-list options broke nearly all volume records in 2021, driven by the growth of retail participation: daily records (24 of the top 25 volume days of all-time came in 2021), monthly ADV records (April was the only month from 2021 not in the top 12 all-time), and yearly ADV records (37.3M ADV in 2021 was nearly 10M more than in 2020 and double the ADV in 2019).
Increased retail activity in the equities market has affected which stocks are trading the most, and when and where those stocks trade. We’ve previously highlighted retail’s impact on pre- and post-market volume and the opening auction, and now focus on the period immediately after the opening auction. Market participants often avoid this time of day due to higher volatility, an approach worth re-evaluating given current trends.
As the home of ETFs, the NYSE continuously works to strengthen market quality and provide the optimal trading environment for listing and trading ETFs. In April 2021, in service of this goal, the NYSE introduced new requirements and incentives for its industry-leading NYSE ETF Liquidity Program, including the assignment of additional market makers ("Less Active ETF Leads") for new and/or low-volume ETFs.