This year, US equity markets have been shaped by record trading volumes, high retail participation, and a growing number of new venues entering the space. Gregory Corrigan, head of equity and FX trading at Legal and General Asset Management, discusses the trends driving trading patterns in 2025; how equities desks are adapting their execution strategies and venue selection in trickier liquidity environments despite high activity, and how the rise of alternative trading venues is shaping US market structure.
Looking ahead, Corrigan also unpacks the growing discussion around longer trading hours, the impact of new exchanges shaking up the current model and other structural reforms such as REG NMS.
Interview
Jo Gallagher Describe the backdrop—what has been driving trading patterns and equities volumes this year?
Gregory Corrigan Well, in the first half of the year, the period heading into “liberation day” and the volatility that followed certainly set the scene for equity volumes this year. In the US, we’re averaging around 17 billion shares per day, which is 40% higher versus the previous record set last year. On a notional basis, we are also breaking records. We are averaging close to $800 billion per day which is 30% higher versus last year. Retail investors are certainly playing their part as they have been buying aggressively since April 9th. Estimates suggest retail have been net purchasers of stocks 17 out of the last 19 weeks, which is one of the longest streaks that we’ve seen. Retail investors are particularly active in stocks that are priced below $5, which makes up around a third of the volume on any given day. So that is certainly adding to the jump in share trading we’re seeing. 17 of the largest share trading volume days of all time have come this year, with a peak being 30 billion shares, and that’s the one and only time we’ve seen that in history, which was April 9th, where we got a tariff pause and the S&P rallied nearly 10%. When it comes to spreads, record-breaking volumes don’t necessarily mean tighter spreads in the equity market. We’ve been seeing wider spreads on average versus the five-year average, and on particularly volatile days, like in the first half of the year, we were seeing spreads hit 15 to 20 basis points, which is three to four times wider than normal. Part of the reason is down to higher prices, so higher prices do indeed lead to wider spreads and more intra spread trading. The average price of a large-cap stock is now around $215, and nearly 10% of all stocks in the US have a price of $200 or more. As a result, we are seeing off-exchange volume continuing to climb.
Jo Gallagher So how are equities desks adapting their execution strategies and their venue selection process in these trickier liquidity environments?
Gregory Corrigan First of all, traders should adjust their strategy based on the time of day. So at the beginning of the day, they should try and trade more passively. Then towards the end of the day, in the final 10 minutes, it can be incredibly beneficial to traders looking to access more liquidity, as we see a spike in volumes here with about 25% of the day’s volume going through in this period. Traders should also endeavor to tap into non-displayed liquidity by utilizing a suitable algorithm to do so, prioritizing cleaner venues, which can help traders limit their impact in the market. As a result, we are seeing performance improvements due to reduced market footprint, avoiding what can be adverse selection from more toxic order types. And as these cleaner venues are not always part of the price formation process, it means that traders are not having an impact on the screen price of the stock.
Jo Gallagher What broader impact are these buy-side liquidity demands having on US market structure?
Gregory Corrigan We are seeing the rise in alternative venues, such as Trajectory Cross and other innovative venue types that are helping traders limit this impact in the market. ATSs now make up over 10% of the volume on a given day. And within that, trajectory crosses are on the rise. Time-based trajectory simply allows two sides of the trade to match off each other at the volume-weighted average price over a particular time period. Analysis shows this results in minimal markets for orders interacting with this order type. And we are seeing VWAP slippage as a percentage of spread hit the lowest I have ever seen. Other innovative venues that are gaining in prominence are those with sophisticated matching logic. One Kronos is one that comes to mind. This venue works by running auctions every 100 milliseconds or so, and orders are matched on an aggregate notional price improvement basis. We are seeing more liquidity migrate to this type of venue as the markets are extremely low with the quality of the liquidity extremely high, resulting in significant performance improvements.
Jo Gallagher As you mentioned, there are a lot of new alternative venues entering space. What else is on your radar that has the potential to change market dynamics over the next few months?
Gregory Corrigan In addition to new ATS launches, we are preparing for new exchanges to come to the market as well. We’ve heard a lot about the potential for round-the-clock trading, and this year, 24X became the first SEC-approved national securities exchange that offers trading 23 hours a day, five days a week. 24X will compete with the likes of Blue Ocean, NYSE ARCA, Cboe Global Markets, and likely others will come to the table to offer this model as well. There is still a huge amount to do though, and the use case for institutional investors remains somewhat unclear. On the issuer side, it is also heating up in terms of competition, with several new exchanges having either filed or planning to. Texas Stock Exchange, Green Impact Exchange, and the Dream Exchange all come to mind. NYSE have also announced their plans to launch NYSE Texas, an electronic equities exchange. We will also have an SEC roundtable in September to discuss trade-through prohibitions in the national market system stock markets. This roundtable will allow industry participants to comment on REG NMS and the potential for SEC rule changes. This certainly has potential to change the equity market structure and landscape, and is something all market participants should be keeping a very keen eye on.
Jo Gallagher Thank you Greg, for your insight, and of course you for watching. This has been TraderTV This Week.
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