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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: TraderAlan who wrote (17426)	9/16/2005 12:09:14 AM
From: TraderAlan	Respond to of 18137

Program trading in the week ended Sept. 9 accounted for 54.2%, or an average of 816.6 million shares daily, of New York Stock Exchange volume. Brokerage firms executed an additional 634.3 million daily shares of program trading away from the NYSE, with 1.3% of the overall total on foreign markets. Program trading is the simultaneous purchase or sale of at least 15 different stocks with a total value of $1 million or more. Of the program total on the NYSE, 8.3% involved stock-index arbitrage. In this strategy, traders dart between stocks and stock-index options and futures to capture fleeting price differences. Less than 0.1% involved derivative product-related strategies. Index arbitrage can be executed only in a stabilizing manner when the Dow Jones Industrial Average moves 200 points or more from its previous day's close. Some 52.4% of program trading was executed by firms for their clients, while 42.6% was done for their own accounts, or principal trading. An additional 5.0% was designated as customer facilitation, in which firms use principal positions to facilitate customer trades. Of the five most-active firms overall for the week, UBS AG's UBS Securities executed most of their program trading as principal for its own account. Morgan Stanley, Merrill Lynch & Co., Goldman Sachs Group Inc. and Deutsche Bank AG's Deutsche Bank Securities executed most of their program trading activity for customers, as agent.