Subject: File No. S7-02-10
From: Troy Hanninen

May 25, 2010

To whom it may concern:
I would like to point out that, in my previous comment to the SEC on April 13, 2010, I stated:

"I believe, as time goes on, most traders are approaching the markets in the same manner I am and taking liquidity instead of providing it. This will create larger spreads between the bid and ask prices, and, in my opinion, in the case of a large geopolitical event, will create a sell-off of an unprecedented nature as all market participants will simply step away or push the market lower."

I believe that the "Flash Crash" of May 6 substantiates this statement. I didn't 'predict' the Flash Crash, I simply brought awareness to the environment in which it could take place. Although there was no 'geopolitical event' that caused the Flash Crash, the fact that it happened so easily is quite astonishing. We should all be very aware of what can happen in this market at any time due to High Frequency and Flash Trading.

I am in favor of the "Trade At" rule and I am against sub-penny orders and flash trading. How many supporters of High Frequency Trading are actually on record prior to May 6th saying that the market could have never-before-seen volatility and risk? I believe the answer is zero. Supporters of HFT and Flash orders only want to argue how much they are saving their customers by price improvement. However, are they also calculating in the cost of wider spreads due to diminishing liquidity? Do they really believe that the average retail customer is 'saving' money at .001 cents per share? How much did they save their retail customers on May 6th when some spreads were more than two dollars and they were trading .001 cents in front of a bid or offer? How much money did they save their customers on May 6th when many stocks traded for one penny, yet the NYSE exchange used common sense and human intervention to make a legitimate market?

I know the SEC has a difficult decision ahead. But you have been given all of the information you need to make the right decision. Not only do you have the information in letters such as this, but you also have the market structure of MAY 6, 2010 to see what kind of damage can be done by these large computers and to begin regulating High Frequency and Flash Orders. Let's hope we have this monster regulated before an actual 'geopolitical event' takes place.

Troy Hanninen