Discussion Overview
The discussion centers on the impact of computer trading on stock trading volume statistics, exploring whether these statistics reflect all trading activities, including flash trades, and how historical trading theories have adapted to modern practices. It encompasses theoretical, historical, and statistical perspectives.
Discussion Character
- Exploratory
- Debate/contested
- Historical
Main Points Raised
- One participant questions whether computer trading has significantly increased trading volume statistics or if certain trades, like flash trades, are omitted from these statistics.
- Another participant notes that the minimum block size for reporting trades has changed over the years, indicating a shift in how trading data is presented.
- It is mentioned that trading volume has declined over the past decade, with indexed ETFs and mutual funds being cited as contributing factors, while also asserting that off-exchange trading is included in volume statistics.
- A reference is made to historical trading theories, such as Dow theory and technical analysis, which were developed before regulations against insider trading, suggesting that these theories aimed to track 'smart money' movements.
- One participant emphasizes that every trade, regardless of size, is reported on the tape, contradicting earlier claims about transaction size reporting.
Areas of Agreement / Disagreement
Participants express differing views on the effects of computer trading on volume statistics and the historical context of trading theories. There is no consensus on whether trading volume has increased or decreased due to computer trading.
Contextual Notes
There are unresolved assumptions regarding the completeness of trading volume statistics and the definitions of terms like "flash trades" and "block size." The discussion reflects varying interpretations of historical trading practices and their relevance today.