DAN...
Perhaps you missed my point. You make it sound as if I am begging the question "What are the ECN's so upset about?"
This may not have been your point, but I am vehemently against the proposed systems because, as you eloquently put it, only benefit specific MM's. Namely, the larger firms with the gargantuan orders that they want to squeeze more profits from.
I agree with you that the ECN's that helped build and reinforce the NASDAQ as a legitimate market are the very same participants being detrimented by these proposed changes. My point was that NASDAQ appears to be trying to reinvent itself into a large crossing network, albeit still an inefficent one that WILL NOT cross SUPERSOES stock (meaning SOES buyers and SOES sellers will not be crossed against each other - possibly due to programming issues, though I would like to see this issue taken care of at some point).
I also agree with you that stale quotes are a problem in NASDAQ and that the SUPERSOES system appears to remedy this. We are on the same page regarding that.
I appreciate your posts and informative input, though sometimes I feel you view anything I write as adversarial. I wouldn't be here posting if this were the case. I am here to learn as much as anyone else.
On that note, I will give my thoughts on the system as a whole once it finally implements and I have a clearer picture of what the new system(s) mean to all traders.
One final point... NASDAQ has given the option to ALL participants regarding how one views ECN pricing included in the montage. Thus you can opt not to see pricing with ECN fees or with these charges factored in. I personally think there is nothing unfair or deceptive in what NASDAQ has done regarding this. If an ECN is going to charge a fee (some charge as much as $.03125 per share), I want to know if there is a better execution route. If any of you are professional traders, you ALL are billed these ECN costs back to you one way or another. For market makers, they are OBLIGATED to print against a lot of these ECN's for their customers. If you are going to have order handling rules (which I 100% agree with), you can't have it both ways. If I have to compete with an offering and take stock to fill a customer limit order I should NOT have to lose money on all of these trades (if you have to pay 1/32 on 5000 shares why should the market maker lose $156.25 in ECN fees?). Say what you want about how you feel about market makers (you have made it quite clear your 'dislike'), do you really think they should lose money on all limit orders? Thus I again believe NASDAQ has done the right thing on at least this issue. We all have our opinions though.
Thank you for your response and I look forward to further debate regarding the pros and cons of this system with you and others.
All the best,
-- Gene |
