I will use JNPR as an example but the same thing is happening in most other Nasdaq fast moving stocks. Todays trading range LOW 13.42 HIGH 14.25 Volume Approximately 10,000,000 shares December 2000 Estimated daily trading range LOW 135 HIGH 145 Volume Approximately 10,000,000 shares Lets say that at December 2000 I had a trading account of $15K On margin it would allow me to buy 200 shares, My maximum daily profit would have been 200*10 = $2000 If I was going for the same profit today with the trading account of the same size I would have to trade lots of 2000 shares. And we can clearly see that volume now is equal or even lesser than it was a year ago. Knowing that JNPR is kind of stock that is mostly moved by daytraders I find it strange. In my opinion it would be natural that as a daytrading stock becomes cheaper the volume should be moving up.
The reason for this is because there are far fewer daytraders active today than there were last year and trading volume(in terms of actual dollars) has signifigantly dropped since last year. Just looking at volume by itself can be misleading since its the actual dollar amount that matters.
I don't think that there are far fewer daytraders now than last year. There is much less casual traders with etrade and schwab accounts but i think that actual number of full time serious day traders is steady.
Maybe the number of full-timers is the same, but they are not doing the volume that they were last year. These past few months my volume is about half of this time last year.
>I don't think that there are far fewer daytraders >now than last year. There is much less casual >traders with etrade and schwab accounts but >i think that actual number of full time serious >day traders is steady. Do you really think that the trader numbers are pretty much the same now and we are all just trading radically smaller dollar lots? C'mon -- I'll bet the traders that are left (pros) are likely trading bigger dollar lots than ever. Say it however you want Michaelday. It's clear from your numbers that there are far fewer dollars being traded in JNPR than in the past. The only hypothisis that makes sense to me is "fewer traders". IMO JB
Could you give some support for this? In the market we have had the past few months why would anyone be trading big volume?
No doubt the trading volume is smaller in general comparing to last year.. majority of dumb money got washed out. In the specific case of JNPR, the price dropped too low already, people doing the index arbitrage prefer the higher priced stocks (i know, there are few left). e.g. QCOM, EBAY etc. So if you compare the trading volume on the higher priced stocks, the $$$$ drop off would be less dramatic.
>C'mon -- I'll bet the traders that are left >(pros) are likely trading bigger dollar >lots than ever. >Could you give some support for this? In >the market we have had the past few >months why would anyone be trading >big volume? The only support I can give is my personal experience with the experienced traders that I know. As the prices tumbled their share sized went up accordingly. They money manage based on dollars risk and % of portfolio, not share size. Of course if the liquidity is such that they can't get in and out with the size they need, they diversify. Your results may of course vary. JB
Turok, What type of traders are these? Daytraders, Swing Traders, Professional Traders...are they working for themselves?
Both day and swing, all trading their own accounts. I don't personally know any professional traders other than through their writings on this board. JB