November 11, 2014
The trade at portion of this pilot is the key and should be applied to ALL equities, not just small cap stocks. Do not be swayed by the big banks who run pools and make money off their own client order flow that way. They are simply trying to protect a great injustice. You have to consider that every time an order is executed away in a dark pool at the same price (or some cruel di minimis price like 15.997), it is 100% trading ahead of potential customer orders who have the right to be on the other side of that order. There is a NEGATIVE obligation that nobody talks about and it is killing our markets. It used to be illegal pre Reg NMS to trade for your own account AHEAD of a public customer order. Now it is encouraged by the formation of ATS pools where brokers simply head off these orders before they get the chance to trade with other natural buyers/sellers on the exchanges. Please understand that the answer is SIMPLE: Liquidity and confidence runs deep when you aggregate order flow into fewer places (1 exchange in theory would be best). If there are fewer places to go, liquidity increases and all players(good and bad) will have fewer places to hide. Please understand that this is THE answer rather than chasing all these rabbits around a very fragmented, complex, and fully broken market structure we live in today. Dont be fooled by the players running the game. Make the exchanges compete for listings, but make the actual nuts and bolts of trading a simple utility we can all flock to and understand. Thank you.