Third-quarter trading ended inconclusively.
In the sample group, we saw slight increases in structured products, prime brokerage order flow indicating modest hedge-fund month-end shuffling and a tight balance between what we call Prime and Electronic order flow.
Structured products are sellside solutions designed to manage risk and achieve mostly short-term returns for buyside clients.
The Prime and Electronic order flow is more proof that the buyside is cost-focused and using direct-market-access trading whenever possible.
Three major takeaways for investor relations professionals: 1.
Learn the kinds of trading desks driving your order flow at month-end and quarter-end.
Why? Order flow data tells you who's got the bulk of your free-floating liquidity, be they short-term trading vehicles, hedge funds, programs, and so on.
They may also pinpoint possible hidden liquidity overhangs, and reveal what to expect when program traders adjust models in the new month and quarter.
2.
Investors have not committed with enthusiasm to equities, despite the Fed's intervention and recent Dow strength.
What does ModernIR see in the data to support this? We see order flow reflecting unprecedented risk-management efforts.
If you're planning aggressive October outreach, plan it carefully or expect few results.
And if you know that your financial results will significantly depart from expectations, the degree of response in your equity will turn on this fact (unenthusiastic response to strong performance) and on point #1 above (sharp downticks on poor performance as quant models sell into anemic value buying).
3.
Be picky about your sellside relationships and spend more time going direct to the buyside, because the buyside is spending more time going direct to the market.
Explanation is likely to be redundant, but we'll simply say that single-issue long investment is harder and narrower now, and knowing your market structure is key to spending time wisely.
In the sample group, we saw slight increases in structured products, prime brokerage order flow indicating modest hedge-fund month-end shuffling and a tight balance between what we call Prime and Electronic order flow.
Structured products are sellside solutions designed to manage risk and achieve mostly short-term returns for buyside clients.
The Prime and Electronic order flow is more proof that the buyside is cost-focused and using direct-market-access trading whenever possible.
Three major takeaways for investor relations professionals: 1.
Learn the kinds of trading desks driving your order flow at month-end and quarter-end.
Why? Order flow data tells you who's got the bulk of your free-floating liquidity, be they short-term trading vehicles, hedge funds, programs, and so on.
They may also pinpoint possible hidden liquidity overhangs, and reveal what to expect when program traders adjust models in the new month and quarter.
2.
Investors have not committed with enthusiasm to equities, despite the Fed's intervention and recent Dow strength.
What does ModernIR see in the data to support this? We see order flow reflecting unprecedented risk-management efforts.
If you're planning aggressive October outreach, plan it carefully or expect few results.
And if you know that your financial results will significantly depart from expectations, the degree of response in your equity will turn on this fact (unenthusiastic response to strong performance) and on point #1 above (sharp downticks on poor performance as quant models sell into anemic value buying).
3.
Be picky about your sellside relationships and spend more time going direct to the buyside, because the buyside is spending more time going direct to the market.
Explanation is likely to be redundant, but we'll simply say that single-issue long investment is harder and narrower now, and knowing your market structure is key to spending time wisely.