Dec. 26, 2022
December 26, 2022
I believe that the majority of retail investor's orders should be routed to the lit markets to ensure the markets remain fair and provide true price discovery for all NMS securities. Broker-dealers should in no way be automatically routing customer orders to these alternative trading markets or \"dark pools\", because it prevents any price discovery from occurring and also allows for the abuse of NMS securities by suppressing their true price on the lit markets.
HFT(high frequency trading) systems/algorithms exist today to provide rapid order matching without having to auto-direct these orders to the dark pools. Allowing time for these orders to hit the lit exchanges will promote price discovery of NMS securities. Also limiting the fees will prevent broker-dealers from profiting off auto-directing their customer's orders to these dark pools. Orders should always be competitive to ensure fair market structure. These alternative exchanges or dark pools have been used to continually abuse for the profits of the greedy.