ECNS will never provide liquidity and will never step in on their own. Its all about theclients. An ECN is only as deeep or liquid as the traders on the other end. Market makers, on the other hand, must always stand ready to buy and sell. No market maker will offer autofills up to 2 and 5k at 2am.
May be the market maker won't... but I believe using ECN, the possibility to reduced the number of market makers to the point of, [whoever will be left], becomes more efficient if they are to stay in business, is greatly enhanced. ECN is the link that, in time, will allow principal-to-principal transactions more feasible, world wide.
As to the 2 AM issue... just wait for the rest of the world to join trading, as individuals, (and not necessarily "day-trading"), and the 24 hour trading scenario becomes even more feasible yet.
All it is needed is a tad better technology, and a good international promotion. You may be surprised the amount of capital that will begin to flow into the markets. 2 AM in the USA is not the same time in Tokyo, Melbourne, Johannesburg, Rome, or London, or whatever...
Its silly IMO to even fathom all night trading. Heck I work as hard anyone and will adjust to anything, but their is a morality issue as well. We shouldn't reward all night trading. Convenience stores and medical emergency rooms should be open at 3am. Everyone else should be at home, taking care of their family at that time. Could you imagine how stressful that will be for some traders. Most are already addicted and cant stand being away from their terminals.
a bad move...
Ah, there we go with the "regulation of morality", sorry but it has never worked, nor will it ever work. Your morality may not be the same as your neighbor. It is as simple as the example of 2:00 AM.
The morality of 2:00 AM in the USA, is simply not the same of Tokyo 2:00 PM... or whatever.
The "addicted" will find the way to do his/her thing regardless of your attempt to impose your morality.
I believe, "all things considered", that the globalization of trading, including a 24 hour market that "never closes" is indeed a very positive thing... imagine the new pool of capital that it is waiting out there to be tapped and the countless entrepreneurs that would access it.... will there be frauds and scams, etc? Well, as sure as there are crappy fleas in the bulletin board market, but once again, the positives seem to be larger and more numerous than the negatives.
Besides, I do believe that the professionals, including the exchanges, have seen the writing on the wall, and it is better that this take place under the eyes of the somehow regulated environment, than allowing raw technology link up and do it anyway. I say so simply because their experience may be helpful in developing the infrastructure faster and better, not out of fear that a less regulated environment could be harmful....
I quote:
Regulation - which is based on force and fear - undermines the moral base of business dealings. It becomes cheaper to bribe a building inspector than to meet his standards of construction. A fly-by-night securities operator can quickly meet all the SEC requirements, gain the inference of respectability, and proceed to fleece the public. In an unregulated economy, the operator would have had to spend a number of years in reputable dealings before he could earn a position of trust sufficient to induce a number of investors to place funds with him. Protection of the consumer by regulation is thus illusory."
~ Alan Greenspan
I think Charles Schwab & Co. is already way ahead of everyone, and very much on their way to becoming a true global broker
....I think someone else in this thread was already clamoring that "we the people" should start writing to the local mobster... I mean Congressman... yeah well... The following expresses more closely to the truth, the real function of a politician....
"The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary."
~ H.L. Mencken
The securities market and indeed the commodities markets, are the last bastion of true Laissez Faire Capitalism, and the proof that free markets do work, based on the word of traders, exchanging value for value.... mostly, free of regulation. Yes there are crooks, as there is everywhere, but the existing system has operated well, for a very long time, and promptly the really crooked ones are singled out and eventually they fade away, or get caught ...
Let's not forget that "we the people" have also the obligation to educate ourselves and acquire certain basic knowledge that can allow us to operate profitably... No amount of regulation, including, the imposition of a specific moral standard, "by law", will protect us against our own stupidity and/or ignorance. Don't forget that.....
"When buying and selling are controlled by legislation, the first things to be bought and sold are legislators."
~ P.J. O'Rourke
Long live free markets ! (They are coming to the world near you). |
