Post date: 2023-11-07 22:13:45 GMT
Uncover Last Month's Market Movements: Institutional Investing, HFTs, and Retail in October 2023
Our company, AbleMarkets, uses the latest Artificial Intelligence (AI) and microstructure research to estimate the proportion of flows generated by Retail, HFT and Institutional investors near real-time. However, daily and even monthly statistics are incredibly useful and interesting to explore.
An analysis on the last month’s flow data revealed several trends:
Institutional investors net sold U.S. stocks in October, 2023. Specifically, they swapped stocks with high market risk (“high beta”) for stocks with low market dependency. This is consistent with the market expectation of a recession that dominated the news last month. Institutions also moved toward higher priced and less volatile stocks, seeking safety in their portfolios.
High-Frequency Traders (HFTs)
HFTs followed institutional money. They also focused on lower-beta, higher-priced stocks with lower volatility, arbitraging markets around institutional trades.
Retail folks, on the other hand, held the opposite end of institutional and HFT transactions. Retail investors net bought last month, and, specifically, ended up with higher beta stocks with lower valuations and higher volatility on aggregate.
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