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A significant shift in US stock market structure has emerged as off-exchange trading now dominates market activity, accounting for 51.8% of traded volume in January – the fifth consecutive monthly record.
This historic transition from public exchanges to dark pools and internal firm trading represents a fundamental change in market dynamics.
The trend is particularly driven by sub-dollar stock trading among retail investors, typically handled by major market makers like Citadel Securities and Virtu Financial.
While the shift raises theoretical concerns about price discovery and market efficiency, Jefferies analysis shows that excluding sub-dollar stocks, off-exchange trading remains below 40%. Meanwhile, alternative trading systems (ATS) have grown in popularity, with daily volume reaching 1.7 billion shares in November, up 36% year-over-year, as institutional investors seek to minimize market impact.
