July 27, 2010
All trades should be settled in the same manner and timeframe. No Exceptions. Market maker exceptions invite exploitation and fraud. If the shares aren't delivered, the sponsoring agent should have to buy them in the open marrket, and if the cash is not delivered, the shares should be sold to cover. No naked short positions should ever be allowed. Individual investors don't get that advantage and market makers shouldn't either. In Addition, all trades should be in .01 increments to discourage High Frequency Trade abuses, and everyone should pay for their trading. Allowing prime brokers to rebate to high speed traders for volume should be illegal. High frequency traders should pay per transaction just like individuals. Traders, not taking positions, are detrimental to assset values and do disproportionate damage on the downside to asset values, while offering no market benefit to anyone other than themselves. I know they cry liquidity and price discovery and I challenge anyone to actually prove that point. I fail to see how any firm controlling both indside quotes is assisting anyone but themselves. In fact, they trade so fast, how can you be sure they are not just moving shares form account to account to impact market pricing.