SIFMA - Securities Industry and Financial Markets Association Inc.

11/18/2024 | News release | Distributed by Public on 11/18/2024 09:29

The 2024 Market Structure Conference Debrief

Perspectives & Key Themes from Market Participants on Equities and Options

Recently, SIFMA hosted our annual Market Structure Conference, with a full day dedicated to listed options and equities. Across the two days, we gained insights into top-of-mind topics for market participants. Inside this note, we recap just some of what was seen and heard, including:

  • Setting the Scene: Based on conference survey results, S&P 500 to increase somewhat (55%); VIX in the low 20s (40%); equity ADV 11B to <12B shares (50%); & options ADV 45M to <50M contracts (61%).
  • Market Outlook - Higher rates. Geopolitical tensions. Good news/bad news econ data. The election. Markets keep going, beyond the Magnificent 7. We analyze what's next for the economy, monetary policy, & markets.
  • Industry Outlook - Options: 2024 = 5th record year for options volumes (46.4M contracts); driven by retail investors, demand is real/growing. With 18 exchanges, what is the value add of the 16th, 17th, 18th, x-teenth exchange? Short-dated options are not new, but the growing popularity among retail investors is. What could change once President Trump takes office?
  • Industry Outlook: Equities - With 16 exchanges + 2 in registration, should there be a minimum market share requirement for a new exchange to earn protected quote status? Yes, other asset classes trade after hours, but should we let another region dictate potential changes to US market structure? SEC proposals/rules - glass half full = the finalized ones are better than the proposals; glass half empty = the proposals/rules could increase costs to investors and the cost of capital for issuers. What's next - a new SEC Chair next year; a potential pause and reassessment; and better engagement with the industry moving forward.

Author

SIFMA Insights
Katie Kolchin, CFA

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