Charting The Stunning Monthly Change In April ETF Volume

Tyler Durden's picture

According to the National Stock Exchange April is so far shaping up to be a very cruel month for banks. After the March spike in trading volume and volatility in the aftermath of the Japanese earthquake and Fukushima disaster, April saw broad market volume tumble, particularly as represented by the one "synthetic CDO" product that everyone appears to be in: ETFs. While in March, ETFs accounted for 31% of all equity volume, in April, this number dropped to 27.5%, although it is the key components that bear pointing out. The traditionally most popular ETF, the S&P500 SPDR saw its notional volume plummet from $637 billion to just $386 billion, a 40% drop. If this is indicative of broader stock trading, then April will be a disaster for bank trading desks. Other key ETFs fared comparably: QQQ dropped 22%, and the XLF was down 43%. There was, of course, one major exception. See if you can spot it on the chart below and which should make everyone who is in it very concerned about a possible Finra margin hike in the ETF (because Finra will never hike margins in pure equity ETFs) as was discussed previously.

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Transformer's picture

And you guys wonder why the mining stocks are not doing so well.



Chuck Bone's picture

Mining stocks and gold are about to experience an enormous surge upwards over the next few months.

Cash_is_Trash's picture


The underlying money printing cannot stop.

Rhetoric, then margin hikes are simply plugging the holes in an otherwise capsized and sinking vessel.

Chuck Bone's picture

Can't argue with that. All I can do is make my prediction, buy some GDX, SLW, SIL, GLD, etc and hope for the best. Time will tell.

Transformer's picture

The miners don't go up because all the newbies who don't know much about G/S buy ETF's.  They make a little money, they are happy.  The miners won't run like they did in the past until this gets worked out.

Bastiat's picture

After the piggies flush out the weak hands and take their stocks.  As Sinclair used to say:  leverage in anything to do with precious metals is a death wish.

disabledvet's picture

can't argue with the spike, though.  should have made covering margin easy "and then you have the shares."  amazingly "the CME agreed" and "started raising margin (interest) rates."  i say "mission accomplished CME"--did their job and crushed the speculators.  Does it have an economic impact however?  What are the job estimates for Friday?  Being revised downwards as we speak?

the rookie cynic's picture

We all need to have the "real thing." Most of the commodity ETFs are backed by quess what: OTC derivatives. Yes, you heard that right, T-bills. If the T-bill market goes to crap, then your precious ETFs will go no bid and you'll loss your money, just ask those people who had similar so-called "investments" that linked back to T-bills via Lehman Bros. T-bills are the giant open grave where paper money and paper assets will go to die.

disabledvet's picture

what if "the real thing" is a default by a state in the US since it is well nigh impossible for the Federal Government to default but "more than capable of making member States default?"  "I hear the silence of Greece growing by the week."  I had my haircut.

the rookie cynic's picture

A default by one of the states in entirely possible. Nonetheless, I think the more likely scenario is yet more bailouts. Powerful, populated states like CA, NY, NJ, IL are major status quo players. They're also the most indebted. They will likely get bailed out by the smaller, weaker, if more fiscally responsible states via the toxic-asset-dumping-ground that is the Federal Reserve balance sheet. Ultimately this means the weight of the bad debt will run through Bernanke's printer. Defaults are just a lot more painful. Kicking the can down the road is the easiest route for those in power. Just my two cents.

bjennings's picture

Don't make me laugh.  "the smaller, weaker, if more fiscally responsible states..."  You mean like Alabama where twice as much federal money is coming into the state than is going out.  Look at those states you list - CA and NY have almost twice as much federal funds paid vs. recieved.  Right now those states are carrying the load for the so called smaller, weaker, fiscally responsible states like Alabama.  And judging by your sentiments all they are getting for that gift is sand kicked in their faces.

oogs66's picture

I'm convinced a big portion of volumes is HFT's that focus on ETF arb.  They buy the stocks and sell the ETF and vice versa.  With volatility decreasing there are fewer opportunities so that part of the HFT world isn't adding to volume.  As you take out HFT's we will see just how little real actual volume there is.

long-shorty's picture

Why did I sell our SLV puts for only a $25k profit again? :-(

Robot Traders Mom's picture

because you are trading on one of those 'for fun' websites that teaches kids how to invest.

long-shorty's picture

that was excellent. +1 for you.

anyone wanna borrow my copy of "Position Sizes for Pussies"?

NOTW777's picture

looks like there are good reasons for the friday release of birth cert. and the sun

OBL announcement - wild week is here

disabledvet's picture

you forgot "The Wedding" and "The Beautification."

Ratscam's picture




too much for an extended weekend, looking forward to the world news on 

6.11, 6.13 and 6.21.

6 String's picture

Righty-O. And the robots just have to ramp into the close, right? Isn't that the MO.

You see, if stocks don't ramp into the close things will unravel, now rather than later. The trading in silver has already broken its pattern: the 6 dollar sell-off during Asian time on Sunday was a tell-tell.

It will also be a tell-tell if stocks can't ramp into the close. I mean, apehshit seriously, dollar down with PM's down, Crude down...the Federal Reserve cordinated take-down could be commencing, like, errr, NOW.

6 String's picture

Ah....all is normal. Stocks ramping into close. Dow will end flat to maybe even up.

Silver is ramping down into the close.

Just another day in Fraudville.


6 String's picture

....and there she goes: GREEN.

HUGE_Gamma's picture

flash crash aniversery on friday :).. sell in May strikes again

Cdad's picture

This very fact, volume in other things drying up, is why the margin requirements are being hiked in commodities.  The Chairman will not be satisfied until ALL have followed his orders to reallocate their investments into junk at the tippy top of the most obvious about to fail market top EVER.

This is the wasteland that Ben Bernanke, Mary Schapiro, Hank Paulsen, J. Dimon, and L. Blanfein have made for us.


Groty's picture

I've been expecting a 10%-13% market correction since December.  It just gets more and more overbought.  The longer we go without a correction, the harder the ultimate drop is going to be.  They should just let it correct and get it over with. 

gwar5's picture

Silver shines like a good deed.....

gwar5's picture

What is the meaning of a gold standard and a redeemable currency? It represents integrity. It insures the people’s control over the government’s use of the public purse. It is the best guarantee against the socialization of a nation. It enables a people to keep the government and banks in check. It prevents currency expansion from getting ever farther out of bounds until it becomes worthless. It tends to force standards of honesty on government and bank officials. It is the symbol of a free society and an honorable government. It is a necessary prerequisite to economic health. It is the first economic bulwark of free men”.      W. E. Spahr. 


(Gwar5: Don't even know who Spahr is yet, just happened to run across it. update Walter Spahr, Economics Chair NYU, 1927-56; quote comes from Daily Paul, of course.)

Mesquite's picture


Check the years (lifespan)..

Did he speak out and get 'suicided' for his honesty..?? Curious...

Deep's picture

Hey tyler, where is your


"silver now 46, 45, 44, 43,42"

only on the way up huh?



HUGE_Gamma's picture

he reversed the position at $49.45

real traders go both ways

Deep's picture

I am not knocking him. Love his work. THE BEST

But when silver hits low 30's is he gonna write about it?



HUGE_Gamma's picture

"Silver at $35.. the FED wins" lulz

lets see where this finds support.. people holding physical from years ago are still smiling, people were calling at top at twentyfour

Deep's picture

I was not calling top, i still think silver hits 80-90 when everything is said and done

even at low 30's, no trend line is breached

silver was a bubble at 50's

when i am walking by department stores and the tv salesman is taking silver, ya thats a bubble



MrBoompi's picture

If silver hits $30 you bet we'll be talking about it, because the only question is how big of a truck we'll be loading up.

The SLA is into ounces, not $$$. Selling paper will not increase the supplies of physical silver, it will decrease them. This is the beauty of it all....

Tyler Durden's picture
by Tyler Durden
on Mon, 05/02/2011 - 18:24


... since metals
trade in a paper world, there will absolutely be a correction, even as
central banks continue to turbo print. For all those who believe,
correctly, that fiat is doomed, any intermediate variations should be
more than irrelevant. OTOH any "traders" should have booked profits last
week when our friends at FMX advised to do so.

long juan silver's picture

Looks like a hickory stick has been pulled out.

mayhem_korner's picture

+1 Tyler.

As of 1600 EDT, silver was at $41.50.  That's a drastic move to...hold...hold...12 trading days ago.

I can wait these guys out because I'm holding the stuff and can clink my oz together.  If it falls to $35 or $30 or whatever, I will just get my hands on more of it. 

For you amateurs at macro issues, the fundamentals are not changing - $14.3T of insurmountable U.S. Sovereign debt and two options.  Print the fiat off a cliff (99% chance) or walk away from monetization and collapse the system with double-digit yields on Treasuries.  No elected person is going for option b.  So we store and wait.

Kina's picture

Hey tyler, where is your

 "silver now 46, 45, 44, 43,42"

only on the way up huh?


Really, you should read the posts on ZH all the way through before making a fool of yourself.

monopoly's picture

Just biding time now. Our turn will come....again. The Dark side in control now. They made good moves.


youngman's picture

I see the change or rush to PM´s as a good thing...People are waking up to the crap out there...Gold vs Netflix.....I´ll take gold...but I do not believe in the ETF´s. They have to many holes in the prospectus to worm out of paying you if and when you need it....or earned it....Buy the real stuff....let the computer jockeys play all the way to their Hell.....the day they realize that they have nothing but paper....

unclebigs's picture

Gold and Netflix is the same trade.  That's what you stupid Goldbugs don't understand.  For right now, I'll take cold hard USD cash.  LMFAO!!!!!!

StychoKiller's picture

Need some POMO-Ade to wash down your upcoming FRN salad?  I understand they're a little dry, but here's the good news:  Paper (even with pretty green pictures!) is worth around $85/ton -- so you got that goin' for ya!

monopoly's picture

Why are some of you so disgustingly violent with your words? Since when does a market move straight up with 0 corrections. Are you so petty, so jealous, so absolutely stupid to not understand what is going on with this planet. Why don't you go someplace else where people may care about your garbage posts.

Yes, miners, silver, gold are all down, yes lots of red for me on my screens,just part of the process, but when it is all good I do not swamp the site with "I told you so". Why don't you morons grow up or just disappear. What a sad group you are.

unclebigs's picture

Dude, I'm sorry you're getting Corncobbed.  I really am.  The stupid and their money always part ways.  You have my sincere empathy.  LMFAO!!!!!

monopoly's picture

bigs, am not at all down. Am up a great deal the last few years, but I do not brag about it and knock others like you do. You think it is stupid that we have been in gold since 600, you think it is stupid that we have been buying silver since 25. What is stupid are your posts that show you have an IQ of about 50.

It is fine that the dark side is winning now, but why post the crap you do, when you know nothing. Just have a good time on the dark side. Good for you. But turn into a human being and try and understand where we are coming from. Although, that may be too much for you.

unclebigs's picture

Dude, I bought silver at $6.25 and dumped the last of it on Apmex last week at $48.  By the time you came to party, I had already Quadrupled my money.  The precious metals trade is finished for right now.  You're too stupid to see it so you'll buy all the way down and end up completely Losing Your Ass.  LMFAO!!!