First off, I appreciate this thread getting back to its roots, if something like that can be said about something so recent! Thank you, Gene, and contributors.
Second; the SuperSOES system is (as I understand it) designed to reduce dual-liability situations as simultaneous SelectNet and SOES orders can collide. There are many other factors now, and the ECNs are scared because their proprietary order-routing technology (hats off to ARCA, they rock) is going to be subsumed by economically-forced compliance with new NASDAQ rules. NASDAQ's MM system (sorry Gene) seems to be being threatened by the growing liquidity of certain ECNs, and it doesn't take much imagination to see how this could end up.
I believe market makers have a place in the system, and I don't think a legion of daytraders will help liquidity in a real collapse situation. On the other hand, the pay that the market makers accepted for assuming the risk of liability trades is being digested by the daytraders themselves (via the ECNs).
I think SuperSOES, if implemented correctly, will be in the best interest of retail customers, and it won't harm MMs enough to cause them to drop out of the game. That is the balance NASDAQ must strike. Furthermore, the needs of the "big clients" must always come first; Heaven help me the day I want to dump a hundred thousand shares. I certainly wouldn't want to have to advertise that to millions of yokels, fairness be damned. I think they have a right to conceal their actions within the limits of the law, and it's my job (as an independent trader) to do the best I can to try and figure out what they're up to.
For me, that's part of what makes it fun anyways.
Needless volatility means inefficiency, which means profits for the astute. The goal should be to sell the last 1000 shares to the 100K order, through foresight.
Good trading, all,
Simon. |
