Market Data:
In March 2024, a total of 9,095 tickers were traded.
The top-traded ticker, NVDA, with a trading value of USD 1.098 trillion, accounted for a significant portion of overall activity.
The top 5 tickers (NVDA, SPY, QQQ, TSLA, AMD) collectively represented 22.4% of the total trading value.
The top 100 tickers (including 30 ETFs and 70 stocks) accounted for 55.22% of the total trading value.
The top 200 tickers captured 65.53% of the total trading value.
Does this concentration cause more risk or not?
The concentration of trading among a small number of tickers can potentially increase systemic risk in the market. Here are some factors to consider:
Market Liquidity: Concentration of trading in a few tickers can lead to liquidity issues, especially during periods of high volatility or market stress. If there is a sudden sell-off in one of the top-traded tickers, it may be challenging to execute trades at desired prices, leading to wider bid-ask spreads and increased transaction costs.
Correlation Risk: When a few tickers dominate trading, their price movements may become highly correlated. This can increase systemic risk because if one of these tickers experiences a significant price decline, it may trigger sell-offs in other correlated tickers, leading to broader market declines.
Market Manipulation: A high concentration in trading among a few tickers may attract market manipulation efforts. Traders or entities with large positions in these tickers may attempt to manipulate prices for their benefit, leading to distorted market prices and increased risk for other market participants.
Diversification: Investors who hold portfolios concentrated in the top-traded tickers may face increased risk if those tickers underperform or experience adverse events. Diversification across different assets or sectors can help mitigate this risk by spreading exposure to individual ticker-specific factors.
Regulatory Scrutiny: Regulators may closely monitor markets with a high concentration of trading volume among a few tickers to ensure fair and orderly trading. Any market manipulation or abusive trading practices may lead to regulatory intervention, which could further disrupt market stability.
Overall, while the concentration of trading among a few tickers may provide profit opportunities, it also carries heightened risks that investors need to consider and manage effectively to maintain market stability and integrity.
Additional Information:
The data also reveals interesting insights into the top 10 tickers with the highest trading value to market capitalization ratio in March 2024. This highlights the potential for significant volatility in specific sectors, even for companies with a large market cap.
Top 10 tickers with the highest Trading value to Market cap in March 2024:
MARA: 482 %
MSTR: 444 %
SMCI: 312 %
COIN: 125%
AMD: 94 %
TSLA: 59 %
PLTR: 57 %
MU: 51 %
SNOW: 51 %
NVDA: 48 %
In March 2024, a total of 9,095 tickers were traded.
The top-traded ticker, NVDA, with a trading value of USD 1.098 trillion, accounted for a significant portion of overall activity.
The top 5 tickers (NVDA, SPY, QQQ, TSLA, AMD) collectively represented 22.4% of the total trading value.
The top 100 tickers (including 30 ETFs and 70 stocks) accounted for 55.22% of the total trading value.
The top 200 tickers captured 65.53% of the total trading value.
Does this concentration cause more risk or not?
The concentration of trading among a small number of tickers can potentially increase systemic risk in the market. Here are some factors to consider:
Market Liquidity: Concentration of trading in a few tickers can lead to liquidity issues, especially during periods of high volatility or market stress. If there is a sudden sell-off in one of the top-traded tickers, it may be challenging to execute trades at desired prices, leading to wider bid-ask spreads and increased transaction costs.
Correlation Risk: When a few tickers dominate trading, their price movements may become highly correlated. This can increase systemic risk because if one of these tickers experiences a significant price decline, it may trigger sell-offs in other correlated tickers, leading to broader market declines.
Market Manipulation: A high concentration in trading among a few tickers may attract market manipulation efforts. Traders or entities with large positions in these tickers may attempt to manipulate prices for their benefit, leading to distorted market prices and increased risk for other market participants.
Diversification: Investors who hold portfolios concentrated in the top-traded tickers may face increased risk if those tickers underperform or experience adverse events. Diversification across different assets or sectors can help mitigate this risk by spreading exposure to individual ticker-specific factors.
Regulatory Scrutiny: Regulators may closely monitor markets with a high concentration of trading volume among a few tickers to ensure fair and orderly trading. Any market manipulation or abusive trading practices may lead to regulatory intervention, which could further disrupt market stability.
Overall, while the concentration of trading among a few tickers may provide profit opportunities, it also carries heightened risks that investors need to consider and manage effectively to maintain market stability and integrity.
Additional Information:
The data also reveals interesting insights into the top 10 tickers with the highest trading value to market capitalization ratio in March 2024. This highlights the potential for significant volatility in specific sectors, even for companies with a large market cap.
Top 10 tickers with the highest Trading value to Market cap in March 2024:
MARA: 482 %
MSTR: 444 %
SMCI: 312 %
COIN: 125%
AMD: 94 %
TSLA: 59 %
PLTR: 57 %
MU: 51 %
SNOW: 51 %
NVDA: 48 %