Author: Phil Mackintosh

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Comparing spreads across market cap
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Comparing AAPLs and Apples | Nasdaq

We recently talked about how, when you’re doing an analysis of stock markets and trading, it’s hard to compare AAPLs and oranges. We show that’s because market quality metrics – like spreads and depth – are driven more by other factors like market cap, sector volatility and company growth rates.  We also talked about how statisticians approach this...

Three breakdowns of 2022 stock splits
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Analyzing the 2022 Stock Splits

This year we’ve had some notable stock splits, including Alphabet (GOOG, GOOGL), Amazon (AMZN), Shopify (SHOP), Tesla (TSLA) and, of course, Nasdaq (NDAQ)!    Today we take a look at post-stock split tradability for all these stocks. The results confirm our earlier findings that splits fundamentally improve tradability, which saves investors and helps increase valuations.   20 splits so...

Looking at tradability by stock price
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Why Ticks Matter | Nasdaq

Because we want Nasdaq listed stocks to trade as efficiently as possible, we’ve spent a lot of time researching how to make that happen—from looking at how odd-lots are missing from NBBO to how tick-constrained stocks increase spread costs for investors. It turns out stocks can have prices that are either too low (which adds to fragmentation and costs) or too...

Since Reg NMS became effective in 2007, automating trading, stock splits have declined
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Stock Splits Save Investors and Issuers

This year, we’ve already heard from two of the largest companies in the U.S., with some of the highest-priced stocks, that they will do significant (20 for 1) stock splits. So today, we update our work on why stock splits make sense for traders, investors, and issuers. It’s all about improving tradability by reducing frictions...

Percentage of holdings and liquidity in the stock market
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How Much Does Trading Cost the Buy Side?

One of the things that is hard to appreciate about U.S. stock markets is just how huge they are. The U.S. has the largest market cap (representing $59 trillion of market cap). Based on our estimates, U.S. households own around three-quarters of all stocks via pension and mutual funds ($24 trillion) as well as direct holdings ($20...

MM2
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All About LULDs | Nasdaq

Single stock halts, also knowns as “Limit up/Limit down” (LULD), are one of the important market guardrails designed to stop feedback loops in today’s electronically traded markets generating erroneous prices or unnecessary volatility in stocks. Today we summarize how they work and ask: Why are ETFs and stocks treated the same? Market guardrails for dummies...

Retail trading volumes have been increasing over the past few months
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Retail Activity Remains Strong in U.S. Markets

We wrote last year about Nasdaq’s new U.S. Retail Equity Flows (UREF) data that captures retail trading activity in U.S. markets. It showed that retail activity almost doubled during the pandemic, with strong net buying. Today we revisit the data to see what retail did as markets weakened in recent weeks. As markets sold off, retail volumes nearly hit...

Count of IPOs by Listing Exchange
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A Record Year for IPOs in 2021

We wrote last week about the record year for special purpose acquisition companies (SPACs) in 2021. We counted over 1,000 new listings last year, and remarkably over 59% were SPACs. Today we explore another group of listings – traditional initial public offerings (IPOs) – and revisit some research on short and long-term IPO performance.  Record new...

SPACs time to completion and percentage that complete
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A Record Pace for SPACs in 2021

With the world on lockdown, 2021 saw a significant increase in the popularity of special purpose acquisition companies (SPACs) as a way to bring private companies public. It also made some well-known private equity managers accessible to public investors. Looking back, we see that 2021 saw 613 SPAC listings, raising a total of $145 billion...

Historical Gross IPOs
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A Record Year for IPOs

This year has been a good year for a number of reasons: Covid vaccines rolled out, allowing most of us to get back to mostly normal life. Investors also made good returns on stocks, with markets near all-time highs, as corporate earnings recovered and interest rates stayed low.  Another record already set for 2021 is...