The spike in market activity and volatility spurred by the downgrade of U.S. debt, the debt-ceiling contratemps in Congress and the European sovereign debt overhang did not drive overall trading volume to record levels in August.

The recent champion remains May 2010, when the Dow Jones Industrial Average plunged nearly 1,000 points in a Flash Crash on the sixth day of that month.

In the most recent high-activity case, the precipitant was the first-ever downgrade of U.S. debt by a major ratings agency, Standard & Poor's, on August 4. That created a "dizzying first two weeks" of the month, according to Rosenblatt Securities, an agency broker that tracks activity in lit and dark markets.

That led to four days of 400-point swings in the Dow Jones Industrial Average and a higher CBOE Volatility Index. But average daily volume on the nation's stock markets fell in the second half of the month.

August trading volume as a result fell "below the recent high-water mark of May 2010,'' Rosenblatt said.

Average daily volume in August 2011 was 10.4 billion shares. In May 2010, average daily volume was 12.1 billion shares.

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, Rosenblatt said. Nasdaq and BATS each gained more than 1 percent.

The ascendancy of exchange-traded funds, though, showed through in August. Trading in shares of such funds, where transactions can be executed at any point during a session, reached 1.9 billion shares a day in August. That did beat the 1.8 billion shares a day in May 2010, the previous pinnacle.

In the first half of August, Rosenblatt's records indicated that this month was running ahead of May 2010 in overall volume.

The all-time record for daily volume for U.S. equities occurred in March 2009, at 12.3 billion shares a month. Second was October 2008, at 12.2 billion shares a day, according to Rosenblatt.

Both of those months were in the midst of market volatility spawned by the emerging credit crisis, globally.


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