Fundamental Disconnect: Understanding the Nature and Impact of Recent Frenzied Trading

January 29, 2021 | Evan Frazier, CFA, CAIA, Senior Research Analyst

In recent years, most major brokerage firms have participated in a “race to the bottom” with respect to commissions on equity purchases and sales, as well as options trades. This phenomenon, in tandem with the rise in popularity of app-based trading platforms like Robinhood, has afforded retail investors greater access to capital markets. While the democratization of the investment world is beneficial in many respects, it can also lead to irrational behavior and a decoupling of asset prices and fundamentals.

In this newsletter, we analyze the recent frenzied trading activity that has grabbed the headlines, including a summary of what has happened so far and a look at the impact and implications of this behavior.

Read > Fundamental Disconnect: Understanding the Nature and Impact of Recent Frenzied Trading

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Evan Frazier, CFA, CAIA
Senior Research Analyst

Get to Know Evan

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

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