Record Notional Value of Shares Traded on the Nasdaq Closing Cross During the 2024 Russell US Indexes Reconstitution

Rhea-AI Summary

On June 28, 2024, Nasdaq announced a new record for the notional value of shares traded during the Nasdaq Closing Cross, reaching $95.257 billion in 0.878 seconds, surpassing the previous record of $80.898 billion set in 2021.

This milestone coincides with the 40th anniversary of the Russell 3000® Index and marks 21 years of the Closing Cross's role in the Russell US Indexes reconstitution. The event highlights Nasdaq's ability to deliver rapid, transparent price facilitation and support evolving market demands.

Approximately $10.5 trillion in assets are benchmarked to Russell US Indexes, making reconstitution day a significant event for asset managers. Nasdaq's innovative, scalable technology has adapted to a 950% increase in dollar volume over two decades, ensuring seamless operations in the face of growing global trading volumes.

Positive

• Record notional value of $95.257 billion traded in the Closing Cross.
• Execution time of 0.878 seconds, indicating high efficiency.
• 21 years of successful Russell US Indexes reconstitution using the Closing Cross.
• Nasdaq's scalable and resilient technology has adapted to a 950% increase in dollar volume over two decades.
• Approximately $10.5 trillion in assets are benchmarked to the Russell US Indexes.

Negative

• None.

Insights

Market Research Analyst

The significant record set by the Nasdaq Closing Cross represents a noteworthy achievement in the context of market liquidity and efficiency. The execution of 2.899 billion shares at a record $95.257 billion in under a second demonstrates the robustness of Nasdaq's technology infrastructure. This sets a precedent for future liquidity events, particularly during critical periods like index reconstitutions. For retail investors, understanding these dynamics helps in appreciating the importance of liquidity and the technology that facilitates efficient market operations. Advanced technology and reduced latency are crucial, as they ensure that transactions occur seamlessly even during high-volume periods, providing more accurate pricing and reducing the risk of market disruptions. The ongoing investment in scalable and flexible architectures hints at a positive trajectory for Nasdaq's operational effectiveness, which may result in increased confidence among investors.

Financial Analyst

From a financial perspective, the record-breaking performance of the Nasdaq Closing Cross during the Russell US Indexes Reconstitution indicates healthy market activity and institutional participation. The comparison of $95.257 billion executed in 0.878 seconds with the previous high of $80.898 billion in 1.974 seconds in 2021 shows a clear improvement in trading efficiency and scalability. This heightened activity can result in increased trading fees for Nasdaq, potentially boosting its revenue streams. For investors, it is important to note how such advancements in trading technology might affect Nasdaq's financial health positively in the long term. The increased capacity to handle higher volumes without compromising speed and accuracy can lead to higher market confidence and potentially more listings and transactions on the exchange.

Technology Expert

The technological advancement highlighted by Nasdaq's record-breaking Closing Cross is a testament to the importance of resilient and scalable infrastructure in modern capital markets. Reducing latency by over 86% while accommodating a 450% increase in trade volume and a 950% increase in dollar volume over two decades is no small feat. For retail investors, this underscores the critical role technology plays in market efficiency and reliability. Investing in such infrastructure not only ensures that markets can handle peak volumes but also enhances overall market stability. Modernizing global capital markets infrastructure is important as it supports both current and future economic growth, ensuring that market operators can efficiently manage and capitalize on evolving market demands.

Nasdaq Closing Cross continues to play an integral and innovative role in capital markets

Global growth in trading volumes demands increasingly scalable and flexible technology architecture

NEW YORK, June 28, 2024 (GLOBE NEWSWIRE) -- Nasdaq, Inc. (Nasdaq: NDAQ) today announced the Nasdaq Closing Cross had a record day as it was used to rebalance Nasdaq-listed securities in the entire family of Russell US Indexes, part of global index provider FTSE Russell, during its annual reconstitution. This year marks the 40^th anniversary of the Russell 3000^® Index and the 21^st year that the Closing Cross has been used to calculate the Russell Reconstitution.

2,899,191,109 shares, representing a record $95.257 billion, were executed in the Closing Cross in 0.878 seconds across Nasdaq-listed securities, representing the largest liquidity event on the Nasdaq Stock Exchange for the Russell Reconstitution. The new record compares with the second-highest trading day, which represented $80.898 billion, executed in 1.974 seconds across Nasdaq-listed securities during Russell's annual reconstitution in 2021.

“The Nasdaq Closing Cross has played an integral and innovative role in the capital markets, enabling transparent price facilitation for over two decades,” said Kevin Kennedy, Executive Vice President of North American Trading Services at Nasdaq. "We are incredibly proud to celebrate the 40^th anniversary of the Russell 3000® Index while also surpassing the record for notional value of shares traded, and we look forward to continuing to set the official closing price for all Nasdaq-listed securities for the Reconstitution.”

“Russell indexes–now in their 40th year–continue to evolve to reflect the dynamic US economy,” said Fiona Bassett CEO of FTSE Russell. “Annual rebalancing plays a vital role in establishing accurate benchmarks, ensuring they correctly mirror their designated market segments and remain unbiased in terms of size and style.”

The Closing Cross brings together buy and sell interests executing all shares for each stock at a single price, one that reflects the accurate supply and demand for these securities. The technology reflects each symbol’s true supply and demand, providing unparalleled insight into the market close.

All Russell US Indexes are subsets of the Russell 3000E™ Index, which represents approximately 98% of the US equity market. Russell US Indexes allow investors to track current and historical market performance by specific market segment (large cap/small cap) or investment style (growth/value/defensive/dynamic). Today, approximately $10.5 trillion in assets are benchmarked to or invested in products based on the Russell US Indexes.

Russell reconstitution day is one of the year’s most highly anticipated and heaviest trading days in the US equity market, as asset managers seek to reconfigure their portfolios to reflect the composition of Russell's newly reconstituted US indexes. The index reconstitution process was completed today, and the newly reconstituted index membership will take effect when markets open on Monday, July 1, 2024. Please visit our website for more information on the Nasdaq Closing Cross.

Responding to the global growth in trading volumes

Over the last two decades Nasdaq’s industry-leading technology has provided the essential price discovery function that the prices of FTSE Russell Reconstitution depends on. During that time the Cross has reduced latency by over 86% while effectively keeping pace with an increasing trade volume growth of over 450% and an increasing dollar volume of over 950%.

This trend is representative of an extraordinary global growth in trading volumes that has necessitated the enhanced development and deployment of resilient technology in market systems. Nasdaq has long invested to ensure it has the flexible and scalable architecture necessary to manage ever greater volumes, and through our Financial Technology division continues to build on an extensive range of partnerships with infrastructure providers to support their modernization journey.

Modernizing global capital markets infrastructure is critical to maintaining overall system resilience and ensuring market operators can both support and grow with the economies they underpin.

About Nasdaq
Nasdaq (Nasdaq: NDAQ) is a leading global technology company serving corporate clients, investment managers, banks, brokers, and exchange operators as they navigate and interact with the global capital markets and the broader financial system. We aspire to deliver world-leading platforms that improve the liquidity, transparency, and integrity of the global economy. Our diverse offering of data, analytics, software, exchange capabilities, and client-centric services enables clients to optimize and execute their business vision with confidence. To learn more about the company, technology solutions, and career opportunities, visit us on LinkedIn, on X @Nasdaq, or at www.nasdaq.com.

About FTSE Russell:
FTSE Russell is a global index leader that provides innovative benchmarking, analytics and data solutions for investors worldwide. FTSE Russell calculates thousands of indexes that measure and benchmark markets and asset classes in more than 70 countries, covering 98% of the investable market globally. 

FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. Approximately $15.9 trillion is benchmarked to FTSE Russell indexes. Leading asset owners, asset managers, ETF providers and investment banks choose FTSE Russell indexes to benchmark their investment performance and create ETFs, structured products and index-based derivatives.

A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on applying the highest industry standards in index design and governance and embraces the IOSCO Principles. FTSE Russell is also focused on index innovation and customer partnerships as it seeks to enhance the breadth, depth and reach of its offering. 

FTSE Russell is wholly owned by London Stock Exchange Group. 

For more information, visit FTSE Russell.

Cautionary Note Regarding Forward-Looking Statements
The matters described herein contain forward-looking statements that are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements about Nasdaq and its products and offerings. We caution that these statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements involve a number of risks, uncertainties or other factors beyond Nasdaq's control. These factors include but are not limited to factors detailed in Nasdaq's annual report on Form 10-K, and periodic reports filed with the U.S. Securities and Exchange Commission. We undertake no obligation to release any revisions to any forward-looking statements.

Nasdaq Media Contacts:
Gabrielle Vennitti
(914) 510-3354
Gabrielle.Vennitti@nasdaq.com

FTSE Russell Media Contact:
Simon Henrick
+44 (0)20 7797 1222
newsroom@lseg.com

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FAQ

What was the record notional value of shares traded during the Nasdaq Closing Cross in 2024?

The record notional value of shares traded was $95.257 billion.

How long did it take for the Nasdaq Closing Cross to execute trades in 2024?

The trades were executed in 0.878 seconds.

Which index's reconstitution marked 21 years of using the Nasdaq Closing Cross in 2024?

The Russell US Indexes have used the Nasdaq Closing Cross for 21 years.

How much in assets is benchmarked to Russell US Indexes?

Approximately $10.5 trillion in assets are benchmarked to Russell US Indexes.

Why is Russell reconstitution day significant for asset managers?

Russell reconstitution day is significant as asset managers adjust their portfolios to reflect the newly reconstituted US indexes, impacting trading volumes and market activity.

What technological advancements has Nasdaq made to handle growing global trading volumes?

Nasdaq has developed scalable and resilient technology, reducing latency by over 86% and managing a 950% increase in dollar volume over two decades.