TradeWeb, one of the largest operators of electronic exchanges for interest rates, equities, and money markets, has reported volumes of $19.6 trillion during May 2021, which is a slight increase over its volume in the previous month.
The average daily volume (ADV) was 980.4 billion which is 23.9% higher than the ADV for the same month in the previous year. This is a general trend of rising volume across many exchanges around the world as the pandemic slowly recedes and people return to trading full time as the risk in the markets also dies down.
Of this, the money markets accounted for an ADV of over $380 billion which is a massive increase of over 50% as compared to the same period last year. This shows the increase in the trading of money markets from both retail and institutional traders as well as these markets are stable and generally less volatile as compared to the equities.
The pandemic had caused a fall in the trading volumes last year and since the effects were felt very bad in the US, many of the trading platforms in the US suffered a lot during this period. But one of the good things that happened during this period is that it got many non-investors and non-traders also to start looking into the markets seriously, after a long time.
With a lot of spare time on hand and with the prospect of losing jobs and a dull future, many people started looking into money markets and equities as a way of saving for the future and also for earning some extra money to compensate for any extra losses as far as jobs are concerned as the pandemic dragged on for many months. Now with the pandemic receding steadily, these users have stuck around and the professional traders and investors are also coming back to trade in a full-fledged manner which is one of the reasons for the big rise in trading volumes across the board.
With the summer starting pretty soon, we may see a slight dip in the trading volumes over the next couple of months as some of the traders might go on holidays around the world but this is only going to be a temporary dip and overall, this bodes well for TradeWeb and other trading platforms as they look forward to a fruitful year.