Mar. 3, 2023
March 3, 2023 I support the order competition rule. As a retail investor who chooses to hold investments for long periods of time, I believe that order competition is essential for price discovery, which is more valuable to my investment in the long run compared to commission-free trading via payment for order flow. Price discovery is the process by which the market determines the fair price of a security based on the supply and demand for that security. When there is competition between different trading centers to execute orders, it leads to a more efficient price discovery process, which ultimately benefits investors like myself who hold investments for the long term. On the other hand, commission-free trading via payment for order flow may seem attractive to retail investors in the short term as it reduces trading costs. However, this practice can create conflicts of interest, as brokers may have an incentive to route orders to the trading center that pays them the most, rather than the one that provides the best execution quality for the investor. In the long run, the lack of order competition can lead to less efficient price discovery, which can result in less accurate pricing of securities. This can negatively impact the value of my investments over time. Therefore, as a retail investor, I believe that order competition is essential for price discovery and for ensuring that the market operates in a fair and efficient manner.