Subject: File No. S7-02-10
From: Peter Weisz

May 25, 2010

I am a professional trader for a proprietary trading firm. I used to provide liquidity to the market with passive limit orders. Not any more. In fact, not a single person in my office provides liquidity anymore.
Why would we when there is a two-tiered market that allows some firms to step in front of the displayed liquidity and undermine the NBBO? Providing liquidity becomes a lose-lose proposition where when I am right, I don't get filled and when I am wrong, the price is immediately against me. So now when I trade, I exclusively take liquidity. All the traders I know in my office take liquidity. Who in this marketplace is going to display liquidity under these conditions? We saw what can happen to the market with the flash crash, and unless something is done to restore the system of having a NBBO to make it feasible to display liquidity, the flash crash will be just the beginning.