Bank Shares Trade $1.25B Rank 76th in Liquidity Amid Fed Rate Caution and Market Volatility

On October 3, 2025, Bank shares saw a trading volume of $1.25 billion, ranking 76th among stocks by liquidity. The U.S. banking sector exhibited mixed momentum with American Bank (BAC) rising 0.32% amid broader market volatility. Key developments included regulatory updates on capital adequacy guidelines and a Federal Reserve statement on interest rate trajectory, both of which influenced sector positioning.

Analysts noted that the Federal Reserve's cautious approach to rate normalization, coupled with revised stress test parameters, created a neutral-to-bullish environment for major lenders. Institutional investors increased exposure to the sector through derivative instruments, while retail participation remained subdued. Market participants are closely monitoring upcoming earnings reports for clues on loan growth and credit quality trends.

To run this test rigorously we need to be absolutely clear on several practical details that are not yet specified: 1. Universe definition • “All listed U-S equities” (NYSE + NASDAQ + NYSE Arca)? • A narrower list such as the Russell 3000 or S&P 500 constituents? 2. Ranking rule • Rank each stock by that day’s dollar volume (price × shares traded) or by share volume? • Choose the top 500 at the market close (so we trade at next day’s open) or at the open (so we trade at that day’s close)? 3. Portfolio construction • Equal-weight each of the 500 names each day? • Rebalance completely every day? • Are fractional shares allowed (effectively ignoring lot size and liquidity constraints)? 4. Transaction costs & slippage • Should we assume zero costs, or would you like to include, e.g., 2 bp per side? 5. Benchmark / performance statistics • Standard metrics (CAGR, volatility, Sharpe, max drawdown) and comparison with, say, SPY? 6. Data coverage • Our current tools can back-test a single ticker at a time. • For a multi-security daily-rebalanced strategy like this one we would need to generate an aggregated portfolio return series before feeding it to the back-test engine. • I can prepare that series automatically once the above parameters are fixed. Could you please confirm your preferences (or let me know if you’d like default assumptions)? With those answers I’ll generate the return series and run the full back-test from 2022-01-03 through today.