Page 1 of 1
Other Peoples Money and High Frequency Bots
Posted: Mon Jan 10, 2022 11:54 am
by ppnewbie
I was wondering what percentage of the market is actual investing in companies vs leveraged algorithms? I think it's like 90% Algos.
Also how much borrowed money are they using and how does that correspond to the performance of the market.
And how much of the market is leveraged stock buy backs.
https://www.yardeni.com/pub/stmkteqmardebt.pdf
https://www.yardeni.com/pub/buybackdiv.pdf <-- This one does not show how much of it is based on leverage.
Re: Other Peoples Money and High Frequency Bots
Posted: Fri May 23, 2025 5:38 am
by wg93
Leverage and algorithmic trading now prevail in the majority of retail trading. High-frequency and algorithmic trading have been approximated to account for 40-70% of US equity volume traded. Such strategies are primarily executed by institutions through advanced, automated platforms, frequently at high leverage (albeit exact leverage levels frequently are not and even less often reported).
The older, long-term investing ("real investing in companies") constitutes a diminishing proportion of intraday trading volume, but remains accountable for a considerable proportion of total market capitalization.
Market leverage - through margin, derivatives, and institution borrowing - is higher, particularly among quant and algorithmic funds. Although hard data are limited, leverage is a significant contributor to risk as well as return, and can even amplify market movement (both directions).
Stock repurchases funded with borrowed funds (companies borrowing to repurchase their own stock) are large but hard to quantify precisely. Buybacks overall have been a major source of demand for US equities in recent ten years, but the share financed on debt varies with company and market.
Briefly:
- 40-70% of trading is algorithmic/HFT, often levered,
- Conventional investment is a minority share of trading volume,
- Leverage is pervasive and tends to amplify market movements,
- Leverage buybacks are common but precise figures are unknown.
Hope this helps paint the picture of today's market scenario.
Re: Other Peoples Money and High Frequency Bots
Posted: Fri May 23, 2025 6:57 am
by Xan
wg93 wrote: ↑Fri May 23, 2025 5:38 am
Leverage and algorithmic trading now prevail in the majority of retail trading. High-frequency and algorithmic trading have been approximated to account for 40-70% of US equity volume traded. Such strategies are primarily executed by institutions through advanced, automated platforms, frequently at high leverage (albeit exact leverage levels frequently are not and even less often reported).
The older, long-term investing ("real investing in companies") constitutes a diminishing proportion of intraday trading volume, but remains accountable for a considerable proportion of total market capitalization.
Market leverage - through margin, derivatives, and institution borrowing - is higher, particularly among quant and algorithmic funds. Although hard data are limited, leverage is a significant contributor to risk as well as return, and can even amplify market movement (both directions).
Stock repurchases funded with borrowed funds (companies borrowing to repurchase their own stock) are large but hard to quantify precisely. Buybacks overall have been a major source of demand for US equities in recent ten years, but the share financed on debt varies with company and market.
Briefly:
- 40-70% of trading is algorithmic/HFT, often levered,
- Conventional investment is a minority share of trading volume,
- Leverage is pervasive and tends to amplify market movements,
- Leverage buybacks are common but precise figures are unknown.
Hope this helps paint the picture of today's market scenario.
wg93, you're not real, right?
Re: Other Peoples Money and High Frequency Bots
Posted: Fri May 23, 2025 8:03 am
by yankees60
Xan wrote: ↑Fri May 23, 2025 6:57 am
wg93 wrote: ↑Fri May 23, 2025 5:38 am
Leverage and algorithmic trading now prevail in the majority of retail trading. High-frequency and algorithmic trading have been approximated to account for 40-70% of US equity volume traded. Such strategies are primarily executed by institutions through advanced, automated platforms, frequently at high leverage (albeit exact leverage levels frequently are not and even less often reported).
The older, long-term investing ("real investing in companies") constitutes a diminishing proportion of intraday trading volume, but remains accountable for a considerable proportion of total market capitalization.
Market leverage - through margin, derivatives, and institution borrowing - is higher, particularly among quant and algorithmic funds. Although hard data are limited, leverage is a significant contributor to risk as well as return, and can even amplify market movement (both directions).
Stock repurchases funded with borrowed funds (companies borrowing to repurchase their own stock) are large but hard to quantify precisely. Buybacks overall have been a major source of demand for US equities in recent ten years, but the share financed on debt varies with company and market.
Briefly:
- 40-70% of trading is algorithmic/HFT, often levered,
- Conventional investment is a minority share of trading volume,
- Leverage is pervasive and tends to amplify market movements,
- Leverage buybacks are common but precise figures are unknown.
Hope this helps paint the picture of today's market scenario.
wg93, you're not real, right?
As soon as I saw the post that was also my immediate reaction.
I love how you get right on them!
Re: Other Peoples Money and High Frequency Bots
Posted: Fri May 23, 2025 11:36 am
by ppnewbie
These fake post are a nuisance. Thanks @Xan!