JPMorgan: Only 10% of stock trading is based on human intervention

14.06.2017 / 08:55

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Quantitative investing based on computer formulas and trading by machines directly are leaving the traditional stock picker in the dust and now dominating the equity markets, according to a new report from JPMorgan.

Marko Kolanovic, global head of quantitative and derivatives research at JPMorgan, estimates "fundamental discretionary traders" account for only about 10 percent of trading volume in stocks. Passive and quantitative investing accounts for about 60 percent, more than double the share a decade ago, he said.

In fact, Kolanovic's analysis attributes the sudden drop in big technology stocks between Friday and Monday to changing strategies by the quants, or the traders using computer algorithms.

Along with Apple, the big tech-related names fell more than 3 percent each last Friday and dropped again Monday, sending the Nasdaq composite lower in its worst two-day decline since December.

Source: Bloomberg Pro Terminal

Jr Trader Ivan Ivanov

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JPMorgan: Only 10% of stock trading is based on human intervention

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