However, this funneling effect in market activity over the last half-hour of the day, which makes up almost a quarter of all U.S. stock trading, has irked some traders whom argued that liquidity is being sapped away from the middle of the day. According to Credit Suisse, the share of U.S. stock trades that occur between noon and 2:00pm has pulled back to 20% from over 23%.
Some even warn that this sudden rush to trade at the end of the day increases the risks of potential fat finger moves.
“A lot of trading is concentrated in a very narrow period of time,” Marco Pirondini, head of US equities at Amundi Pioneer Asset Management, told FT. “It can be a very big technical problem. I would love regulators to start to think about this before there’s a problem, rather than after one.”
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The first and last half-hour of the U.S. trading day now makes up 39.6% of all daily trading volumes, compared to 31.5% 10 years ago. A decade ago around 16% of all trading occurred in the final 30 minutes of the day, but it has increased to over 20% in 2012 and almost 25% this year.
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