Standard & Poor's spot returns vs Standard & Poor's 500 Future returns: A comparative analysis of the impact of trading volume on the U.S. stock market indices during the 2008 economic recession

In the era of High Frequency Trading, a comparison between the impacts of spot trading volume on the Standard & Poor's (S&P) 500 Index returns and S&P 500 Futures returns is unknown in the present research. Available literature on these topics has demonstrated the positive impact of each one of these phenomena. However, a comparative evaluation on the purpose, structure, and design of these investment apparatus to better understand the goals of individual traders in their efforts maximize their profits as participants in the stock market has yet to be undertaken. Additionally, the impact of the 2008 economic recession severely altered the landscape of the global stock markets. This recent catastrophic event highlights the need to understand the results of the spot and future returns. This study provides an analytic comparison of the effects of trading volume on the returns of the U.S. stock and options market prior to and after the 2008 financial crisis. The goal of the present paper is to determine which market indicator experiences the deeper impact during the recessionary period of the equity markets. The researcher will explore the impact of speculative and hedging strategies of experience future traders on stock returns compared to the impact of investment strategies of both naive and experience spot traders on stock returns. The assessment includes examining the usage of the GARCH models as means of measuring the stock returns and volatility arbitrage throughout this unstable market period.