ITG’s US Trading Volumes Drop in July, Threatening 2017 Lows

Trading activity has taken a dive across the industry despite an influx of volatility.

Independent execution broker ITG (NYSE:ITG) has reported its latest tranche of monthly statistics for July 2017. The figures represent a pullback from its recent volumes, on par with a broader industry consolidation in the institutional space.

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Looking at July 2017, the month featured a number of market drivers, including recurrent shakeups in the Trump administration as well as the USD reaching multi-year lows. Despite reaching the height of summer, an absence of volatility was not the main culprit facing volumes, but rather big money continuing to sit on the sidelines in the institutional sector.

Momentum snapped

In terms of July 2017, ITG reported its total volumes at 2.59 billion shares, relative with 3.65 billion in June 2017, or 29.0 percent lower on a month-over-month basis. ITG’s decline in volumes was not an isolated occurrence, other venues also experiencing similar retreats over a monthly interval. For ITG’s part, the latest reading threatens earlier yearly lows in 2017 during April, when the group reported just 2.4 billion shares traded.

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The latest volumes also snap consecutive monthly advances at ITG, as May and June featured a healthy growth en route to recent highs. 2017 has been subjected to episodic swings of volatility that have helped dictate the flow of volumes across both retail and institutional exchanges. Moving forward it will be worth seeing if the institutional space rebounds if markets continue this trajectory in terms of price movement.

The group’s average daily volume (ADV) also came in at 129.5 million shares in July 2017, vs. an ADV of 165.9 million shares in June 2017, or 21.9 percent lower month-over-month. The number of trading days in July was only 20, relative to 22 in June, which also played a factor, given the observance of the 4th of July in the US.

July 2017 also saw a reduction of the average revenue per share, notably when weighted against its Q2 2017 figures. ITG’s POSIT Alert, an indications matching network that notifies interested buy-side institutions of a block-size trading opportunity, reported an average daily volume of 54.4 million shares in July 2017, down from 62.6 million shares per day in June 2017, or 12.9 percent month-over-month.

Finally in July 2017 ITG’s average daily trading commissions across its Canadian, European, and Asia-Pacific (APAC) businesses were up approximately 8.0 percent in USD terms on a combined basis, relative to Q2 2017.

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