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.