The New York Stock Exchange (NYSE PATH at https://www.webull.com/quote/nyse-path) or the NASDAQ is commonly mentioned when someone mentions the stock market as a place to buy and sell stocks. There’s no doubt about it: these two exchanges handle most stock trading in North America and around the world. At the same time, the NYSE and Nasdaq function differently and list different types of securities. Understanding these distinctions will help you better understand how a stock market works and how to buy and sell stocks. The increase in retail trading activity that started during the spring 2020 pandemic lockdowns is still going strong. This trend has influenced a variety of consumer practices, including auction openings. We’ve already discussed how NYSE Opening Auction liquidity has increased as a result of small order sizes. We look at auction volume interest by sector to show how order entry behavior is evolving.
Opening auction demand has increased in virtually all industries.
- Since Q4 2019, Health Care stocks have contributed around 50bps to the share of volume conducted in the Opening Auction for NYSE-listed Russell 1000 index stocks.
- Auction growth has also been seen in Energy and Materials; the only sector that hasn’t seen growth is Industrials, which has seen a de minimis decline.
- The NYSE opening auction has become a more relevant vehicle for accessing retail liquidity as retail trading and related off-exchange volume has grown.
- The opening auction now trades 58 million shares a day, up from 47 million in December 2020 and 30 million in December 2019.
- Despite an increase in off-exchange volume, the auction has held a combined market share of 1% -1.2 percent of all NYSE-listed market volume.
In reality, sectors with lower market volume growth have higher growth in Opening Auction shares.
Auction Matching Takes Place Earlier
We’ve seen comparable levels of overnight volume as the Opening Auction has risen, but faster growth is paired shares during the auction period relative to Q3 2020.
The total amount entered during the auction time is close to previous months.
Importantly, balancing shares now account for a greater portion of auction interest for a longer period during the imbalance period.
This means that, in comparison to previous months, the “expected flow” entering the opening auction is now more balanced between purchases and vends interest.
Although the flow is entering the auction earlier than in previous months, there is still a rise in the imbalance quantity in the final minutes before the auction. Later-arriving orders are applied to the auction.
Insight and Opportunity in LiquidityThe NYSE opening auction trades 58 million shares and $2.8 billion in notional value per day, excluding expirations, and has increased its market share as retail and off-exchange volume has increased. With interest in the Opening Auction shifting earlier in the morning, paired and imbalanced volume data will provide greater visibility into liquidity opportunities and provide a unique source of available liquidity. For more stocks such as nyse gm which you can check at https://www.webull.com/quote/nyse-gm.