In the wake of the controversy over the downgrade of U.S. debt by Standard & Poor's and the European debt crisis, equity volume surged. For high-frequency traders anyway, the good times seemed to be back. Why, they even had a new gravy-train stock to trade en masse--- Bank of America.

But as Securities Technology Monitor notes, average daily volume for August fell short of the average daily volume figures for May 2010, the month that included the Flash Crash of May 6, according to data compiled by Rosenblatt Securities. Average daily volume in August 2011 was 10.4 billion shares, compared with average daily volume was 12.1 billion shares in May 2010.

"The beneficiaries were the major national exchanges, including the New York, Nasdaq, BATS and Direct Edge exchanges. They gained share, while dark pools and other off-board venues suffered. Off-board venues lost about 3.1 percent of market share. Nasdaq and BATS each gained more than 1 percent."

But we did see record volume in two areas: Exchange-traded funds and equity options. The ETF volume is interesting in that some are convinced these securities are now driving market activity. Average daily trading volume for ETFs jumped 83 percent from July to 2.24 billion shares, according to Bloomberg. Volume in the SPDR, the big daddy of the category, rose 105 percent to 394 million shares per day. Leveraged funds, gold funds and VIX funds all saw volumes rise. The extent to which leveraged ETF and index ETF activity cause volatility is up for discussion.

For more:
- here's the article
- here's a Bloomberg article

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