I recently met up with longtime exchange trader Doreen Mogavero at the NYSE. In this video, Mogavero discusses the percentage of stock trades that actually occur at a major exchange versus smaller, lesser known locations. Have a look (transcript follows):
Morgan Housel: What percentage of all stock transactions actually occur on this floor behind you?
Doreen Mogavero: I think it varies from stock to stock. I would have to say on an average from the statistics that I have seen, and granted I don't work for the New York Stock Exchange, so I don't have the most current statistics that they have. I would guess somewhere around 25%.
Morgan Housel: And 10 or 15 years ago, that was significantly higher.
Doreen Mogavero: Oh, probably significantly higher, yeah. The bulk of the volume that we have lost, so to speak, and I'll say "lost" for lack of a better word, but for the percentage of volume that does not come here has gone to internalized venues, and that would be in the dark pools in the large banking houses, right? So it's not really that we lost it because we've done something wrong; it's the fact that these big banks have not released it into the public marketplace. It resides in their own internal matching engines or dark pools.
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