This desk is participating in a relatively new NYSE program called Supplemental Liquidity Providers.
But before I get into the results, it makes sense to evaluate the facts behind Goldman's retort and in order to do that, let's first observe just what this Supplemental Liquidity Provider program is.
SLPs have the same publicly available trading information and market data that all other NYSE customers have available to them. It is known for a fact that Goldman Sachs and Spear, Leeds and Kellogg (owned by GS) are currently definitive SLPs, with Knight Trading (NITE) and Barclays (NYSE:BCS) also presumably becoming SLPs as well, but there has been no confirmation either way, potentially implying that Goldman could have a monopoly in liquidity provisioning.
The first chart below (click to enlarge) demonstrates total program trading in the NYSE since mid August, a month before the Lehman bankruptcy. The black line demonstrates total indicated program trading, which absent volatility, has remained relatively stable, averaging roughly 4 billion shares weekly.
The chart below (click to enlarge) pulls only the Principal trading data for the top 10 NYSE members. And like before, while the total amount of total Principal trading as a portion of NYSE PT has stayed relatively flat, at about half of total PT volumes, Goldman's share has exploded over the past six months: while GS was responsible for around 27% of Principal NYSE stock trading in Q3 and most of Q4, that number has risen to the low 50% range over the past 3 months. It is obvious that while the majority of top NYSE member firms have had Principal trades stay around 40% of their total PT volume, Goldman has seen its share of Principal trading go from 60% all the way into 90%: a vast majority of all its trades are merely for its own benefit (and potentially as an SLP funnel).
Canaday will approach Zero Hedge and give a more elaborate explanation of what is really happing, and why GS is dominating NYSE program trading, which lately has become a major percentage of total NYSE volume. In the meantime, I will continue presenting NYSE program data, as it is everybody's right to be caught up with all the facts.
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