In your home, who grumpily collects and disposes of the wrapping paper after all the presents have been opened? I must admit my OCDness does put me in this category. Often I’m shambling through the lounge room like the tail ender in a sack race before the first round of unwrapping is finished. Bah! Humbug! Presents!?! Why can’t we just transfer each other fungible tokens?
What goes missing and gets thrown out with the tinsel and the ribbons? Often something small and irreplaceable….until the next Black Friday sale.
We can save the arguments about waste and recycling for another post but in amongst the rubbish often there is some valuable content that we wish we hadn’t thrown away.
The concept of valuable content amongst the rubbish was a primary driver for the founding of big xyt ten years ago. The trading community needed to know how much of the reported trading volume was addressable – and they still do more than ever.
In 2016 about 8% of reported volumes were non price forming/non addressable, but by the end of last year the non-relevant volume had grown to one third of the total European market (get in touch if you want to know why). Then, as illustrated by the first chart, the regulators (both UK and the EU) insisted that enough is enough and the reporting regime tightened up considerably, reducing the irrelevant noise to around 10% of reported volume. That still means that you are overcounting and possibly over-participating if you trust the total numbers as your north star.
Chart 1 – Total vs Adjusted Value Traded
The off book/OTC trade categories are now better described to help transparency but you still need a black belt in data analytics to sort the wheat from the chaff, as you can see in the following three charts showing the before and after effect of the regulatory change across three reporting mechanisms.
Chart 2 – Offbook Flags by Exchange UK100
Chart 3 – OTC Flags by Exchange UK100
Chart 4 – SI Flags by Exchange UK100
If this level of granularity matters to you (and it should if you are trading high touch or low touch) let us know if you need some hand holding through the maze. We are here to help.
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