Bats’ Chris Concannon Eyes Growth of ETFs, Weighs in on Equity Volumes

Bats has released an update on its business structure and performance, its first such announcement since going public, with Chief Executive Officer (CEO) Chris Concannon outlining a number of key points for the company.

The new world of Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term, fintech and marketing – register now for the Finance Magnates Tel Aviv Conference, June 29th 2016.

Looking closer at the recent figures published by Bats as well as the industry on a whole, volumes appear to be down in H1 2016. Indeed, the group’s volume for the twelve months ending April 30, 2016, is lower by a factor of -9.0% from the same period four years ago, which itself averaged 6.7 billion shares per day.

However, a closer inspection shows that actual dollar amount traded each day has actually risen, albeit by a margin of 15% over the same four-year period to more than $283 billion. This is reflective of an overall increase in notional turnover, despite having levels of Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term in the market be down. Looking at January 2016 and extending an analysis back to January 2010, Bats’ notional volume rose by 42%.

While there is not one unified factor in explaining this trend, Mr. Concannon says that one culprit is the ardent refusal of corporate issuers to split their stocks following the end of the financial crisis.

As such, a multitude of popular and large cap US-listed companies have kept their nominal stock prices above $200, $500, and in some cases even $1,000 per share. For every company such as Apple or Google that issued a stock split, other have let their nominal value increase unabated. Unusually high nominal stock prices can potentially impact liquidity in a negative way, as well as trading costs and investor participation, which in turn affects the return of value of equity holdings for investors.

Eye on ETFs

Exchange-traded-funds (ETFs) continue to be one of the most fast growing instruments in the world, with listed ETFs value striking a new record of $2.7 trillion in capital by the end of last year. Moreover, according to data published by Blackrock, assets under management of global exchange-traded products (ETPs) are slated to grow upwards of 17% per annum through 2019. These assets are poised to become an integral component of managed portfolio investments over the next few years.

Furthermore, Mr. Concannon believes that ETFs will serve as an important bridge for emergent investors, i.e. individuals that markets have thus far been unable to reach. He also portends that millennials of the present as well as the future will opt to buy ETFs from their phones for years to come.