U.S. equity market structure is heating up once again as three brand new US equity exchanges are launching within the span of a month. LTSE launched on September 9th, MEMX on the 21st, and MIAX PEARL Equities will launch on the 25th. But why? What makes U.S. equity markets so hot right now?
It is simple, really. It is all about economics and influence.
THE ECONOMICS OF U.S. EQUITY TRADING
U.S. equity trading represents a $2.2 billion revenue opportunity for the exchange industry, with revenues from trading, market data and listings all feeding into the businesses. And revenues have been steadily increasing in recent years, rising by 7.2% annually since 2017. Much of this is driven by this year’s unprecedented Pandemic-driven trading explosion, which is resulting in surging net trading revenues for exchanges. Net trading revenues (total revenues less liquidity payments) are projected to total more than $906.0 million this year, an annual record and a 33.6% jump from 2019.
- Andy Nybo
- Burton-Taylor International Consulting