January 11, 2016
The NYSE and NYSE MKT should be required ro resubmit separate proposals to eliminate Good Til Cancelled Orders and Stop Orders, so that the two order types can be addressed, commented on, and considered separately. We are against both proposals, however will limit our comments here to one order type. The NYSE and NYSE MKT should NOT be allowed to eliminate Good Til Cancelled Orders (GTC's) for the following nine reasons: 1. The price/time priority is a cornerstone of market integrity. Sufficiently limiting the individual's access to the protection provided by GTC's in the time part of the equation further tilts the playing field towards institutions and against individual investors. In addition the the individual investor, this also puts any non-automated trader, trading entity, or investing entity at a significant disadvantage to anyone, or any entity, that has the ability to conduct automated trading at the NYSE and NYSE MKT. NYSE and NYSE MKT begin accepting orders at 7:30 am EST. Anyone that can utilize automated trading will be able to program their systems to enter orders at the same price points, every day, at exactly at 7:30 am, putting them first in line at individual price points to buy and sell stocks each and every day. Even if an individual investor were to be sitting in front of their computer, or on the phone with their broker, exactly at 7:30 am, the likelihood that they will be able to get their order in at exactly 7:30 am ahead of the automated order is very unlikely. With the ability to enter a GTC order the individual investor has never had to be sitting in front of their computer every single day at 7:30 am and try to hit the send button in time to get their order in first. Once a GTC order is entered the individual investor has secured their place in line at a particular price point and no person or automated trading entity can get ahead of that order at the same price. 2. If the NYSE and NYSE MKT are allowed to eliminate existing GTC orders currently in place, then all individual investors, as well as entities, will lose their place in line at individual price points when all the GTC orders are canceled by the exchanges, and the automated trading firms, as well as other individuals, will be able to jump ahead simply by entering a day order at exactly 7:30 am. 3. The NYSE and NYSE MKT state that "The Exchange proposes to eliminate these order types in order to streamline its rules and reduce complexity among its order type offerings." The GTC order is arguably the least complex, and one of the very few order types available to the individual investor, whereas the automated trading entities have over a hundred order types available to them, which allow them to trade ahead of, and game the individual investor. 4. Allowing the elimination of the GTC order at the NYSE and NYSE MKT will make it likely that other exchanges, market makers, and brokerage firms will seek to do the same in the near future, which will further disadvantage the individual investor. 5. Elimination of the GTC order will further erode the investing public's confidence in our financial markets, as their ability to get a non-marketable limit order filled will decline further, and the public's view that the markets are "rigged" against them grow significantly when they see that they can never seem to get their order in first at particular price points, even if they are up at 7:30 am. 6. Without GTC's liquidity will be reduced and volatility will increase at the Exchange, due to participants being unwilling to resend the same orders in day after day. 7. The individual investor will lose the ability to place an order that will remain at the exchange while away on vacation, or away from home more than a day on an emergency. 8. Trading firms and Hedge funds that enter orders manually may go out of business, as the burden of manually typing hundreds, or thousands, of orders each day, instead being able to enter GTC's, may be to great for them to remain in business, thereby resulting in additional loss of market liquidity and increased volatility. 9. The investing public would in no way benefit from the elimination of GTC orders at the NYSE and NYSE MKT.