KCG’s Market-Making Volumes Rise in May as Volatility Picks Up

Markets heated up in May, helping propel KCG's equities and market-making volumes higher.

KCG Holdings, Inc. (NYSE: KCG) has reported its latest monthly trading statistics for May 2017, which saw its market making figures sustain a steady rise relative to the month prior. One of the primary catalysts of this movement was higher volatility across US equity markets, which saw a wide trading range during the month before ultimately setting all time highs across multiple stock indices.

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May 2017 featured no shortage of market drivers, as a range of political scandals engulfing the Trump administration served as a strong mover of stocks. In particular, the abrupt firing of FBI Director James Comey and other notable developments breathed life into markets, which eventually saw indices such as the S&P 500 set all-time highs by month’s end.

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Overall, several exchanges and trading venues during May saw their volumes dictated by these same events, placing KCG on par with the broader industry. During May 2017, KCG reported an average daily US equities market-making figure of $27.7 billion traded, up 5.3 percent on a month-over-month basis from $26.3 billion traded in April 2017. The latest figures did manage to snap what had been a trend of highly consolidated turnover and volumes readings in H1 2017, albeit for the aforementioned reasons.

May 2017’s volumes were also indicative of a healthy double-digit year-over-year increase of 11.2 percent from the $24.9 billion set back in May 2016. Furthermore, KCG’s total average daily shares traded during May 2017 yielded 3.43 million shares, up 4.9 percent month-over-month from 3.27 million shares back in April 2017. The change was lower over a yearly timetable, as indicated by a move of -2.9 percent year-over-year from 3.53 million shares per day back in May 2016. Of note, May 2017 featured 22 trading days relative to just 19 back in April.

Finally, in terms of KCG’s equities business, the segment registered a consolidated US equity volume average of $268.3 billion in dollar volume during May, compared with $261.9 billion in April 2017, or 2.5 percent higher month-over-month. The securities trading group also saw an average of 6.7 billion shares traded per day in May 2017, vs. 6.6 billion shares per day, or 1.5 percent higher month-over-month.

Looking to June, markets appear to be eyeing the US Federal Reserve decision to raise rates. In addition, US stock markets incurred a sizable decline in the early portion of the month across the technology sector, albeit confined to a few key companies – it remains to be seen whether this could stifle any momentum across markets that are all operating at all-time peaks or influence volumes during the rest of the month.

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