The U.S. stock market hit dozens of records in 2017, while there was massive growth in exchange-traded funds, but by one metric things were extremely quiet on exchanges this year.
According to the WSJ Market Data Group, trading volumes in the U.S. were at their lowest level in three years in 2017. Based on total composite volume, an average of 6.43 billion shares were traded each day this year, the lowest level since 2014, when an average of 6.29 billion shares were traded each day.
Last year, some 7.22 billion shares were traded each day, meaning there was a year-over-year drop of nearly 11% in trading activity. In 2010, the oldest year for which the WSJ Market Data Group provided data, daily volume averaged 8.31 billion shares.
For full days of trading, Oct. 9 represented the lowest-volume day of the year, with 4.56 billion shares trading hands. That represented the lowest since Dec. 27, 2016, in the immediate aftermath of last year’s Christmas holiday, which is a seasonally quiet time of year. Including shortened sessions, a mere 2.52 billion shares exchanged hands on Nov. 24 of this year, the lowest day of trading going back to February 2010.
The lack of trading—which has been a headwind for bank revenue—comes alongside a dearth of volatility in markets, which has given short-term traders few opportunities to ride momentum or make short-term bets. Things have been so quiet in major averages that the S&P 500 hasn’t had a 3% decline from a peak in more than a year—an unparalleled length of time.
The average observed one-month volatility in the S&P was lower than any other year since 1970, according to S&P Dow Jones Indices. Of the 56 lowest closing levels in the history of the Cboe Volatility Index VIX, -2.60% , 47 of them occurred this year, per S&P’s data. The so-called “fear index” also notched two all-time closing lows.
The absolute daily percentage change for the Dow Jones Industrial Average DJIA, +0.23% this year was 0.31% in 2017. It was 0.3% for the S&P 500 500 SPX, +0.20% and in both instances, that represents the smallest absolute daily percentage since 1964. For the Nasdaq Composite Index COMP, +0.06% the absolute daily percentage change was 0.44%, the smallest since 1989.
Read more: The last time stocks were this quiet was the year the Beatles went on Ed Sullivan
The SPDR S&P 500 ETF Trust SPY, +0.21% embodies the low-volume trend. The fund is the largest ETF on the market by far, and not only is it the most heavily traded ETF on the market on a regular basis, it is frequently the most traded security of any type.
Last year, the fund saw average monthly volume of 2.2 billion shares. This year (excluding December), the average is 1.45 billion—a drop of more than 34%. There has been lower monthly trading every month of this year except for August, and a mere 1.06 billion SPY shares exchanged hands over all of July, the lowest monthly total since February 2005.
On Thursday, about 58 million shares exchanged hands, or 72% its 30-day average.
In October, the fund saw its lightest full day of trading since 2006.