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Tabb: US cash equities lose order flows for third straight year

Thursday, February 16, 2012

amb
Adam Sussman
Bailey McCann, Opalesque New York:

US cash equities have lost out again on order flows for 2011 according to research released this week from Tabb Group, a US-based strategic advisory and research firm focused solely on capital markets, and the trend is expected to continue through 2012. The report, US Equities: State of the Industry 2012 shows that while many market conditions in the US are improving, cash equities are still having a hard time establishing real order flows.

Adam Sussman, a TABB partner, director of research and author of the report, said in a statement that he doesn't expect single stock volume to rebound until the fourth quarter of 2012. Report data shows that volatility is slowing dropping, and correlations are unwinding but that may not be enough to bring volume back to a desired level - at least for awhile.

The report explains, "As liquidity has dried up, market participants are increasingly turning toward off-exchange routing practices to minimize the cost of trading, explicit and implicit. And yet, the dark market is not helping increase transaction size. Rather, as it grows, its characteristics begin to resemble the market it seeks to avoid."

Sussman writes in the report that, "listed-markets should not be viewed in isolation from the OTC markets; the same can be said for the cash markets and listed-derivatives markets.&q......................

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