Apr. 16, 2026
Subject: Formal Comment on File No. 4-887 – Panel 1: Quote-Driven Markets To: SEC Roundtable on Options Market Structure I am writing to address the systemic failure of the current "Market Maker" model in quote-driven markets. Throughout April 2026, we have witnessed a persistent pattern of Price Pinning, where the market price is artificially held at specific strike prices to maximize the expiration of retail options as worthless. In a truly competitive market, liquidity providers should be indifferent to price direction. However, when Market Makers are permitted to trade against their own clients while simultaneously "pinning" the underlying index (specifically observed in the PHLX Semiconductor Index), they are not providing liquidity—they are harvesting retail capital. I propose a mandatory audit of Delta-Neutral hedging strategies in the final 60 minutes of trading to ensure liquidity provisions are not being used as a tool for price manipulation.