01-02-2015, 02:14 PM
http://www.marketwatch.com/story/better-...2015-01-30
SAN FRANCISCO (MarketWatch) — The New York Stock Exchange, should it follow through on a report that suggests it will introduce a midday stock auction, isn’t going to incur the wrath of Michael Lewis, who’s latest book, “Flash Boys,” argued that high-speed trading has rigged the markets against regular investors.
But the Big Board, now a unit of Intercontinental Exchange Inc. ICE, +0.42% , isn’t exactly doing regular retail investors a favor. Its plan to create a midday auction will match big institutional sellers’ bids and offers for big blocks of shares in a bid to win more business away from dark pools where the same process happens off the tape and anonymously.
That means smaller participants potentially will get cut out again. Big institutions prefer dark pools and auctions because these orders don’t move prices. For example, to move 10,000 shares of a company trading at $10, a seller may reach a deal in an auction to sell for $9.95. The trade shows up on the tape after execution. That’s a whole lot better than putting an offer on the tape for 10,000 shares and watching the price fall to $9.90 before half the shares — or even a single share — is sold.
The NYSE isn’t trying to do anything malicious or radical here. It’s simply trying to keep up with Liquidnet Holdings Inc., Instinet and several dark pools run by Wall Street brokerages including J.P. Morgan Chase & Co. JPM, -2.32% , Barclays PLC BCS, -1.96% and Goldman Sachs Group Inc. GS, -2.03% . The London Stock Exchange LSE, -1.91% already has a midday auction planned to launch later this year.
Supporters of dark pools and off-exchange trading argue that these benefit investors in mutual funds, pension funds, and other big funds that have the girth to participate and that the system improves price discovery by increasing the amount of trading taking place. That’s like saying back-room dealmaking in Washington improves lawmaking. The message in both realms is clear: the public just gets in the way.
Wall Street has traditionally rigged the stock market trading game to favor those who provide big commissions. So, the move to auctions and dark pools designed to create two classes of investors isn’t a big deal.
It’s just the same old raw deal we’ve been getting.
NB:-
Just natural like majority wins or bulk buying always get in front(better treatment and the like).
How shall OPMI response?
Anyone ?
SAN FRANCISCO (MarketWatch) — The New York Stock Exchange, should it follow through on a report that suggests it will introduce a midday stock auction, isn’t going to incur the wrath of Michael Lewis, who’s latest book, “Flash Boys,” argued that high-speed trading has rigged the markets against regular investors.
But the Big Board, now a unit of Intercontinental Exchange Inc. ICE, +0.42% , isn’t exactly doing regular retail investors a favor. Its plan to create a midday auction will match big institutional sellers’ bids and offers for big blocks of shares in a bid to win more business away from dark pools where the same process happens off the tape and anonymously.
That means smaller participants potentially will get cut out again. Big institutions prefer dark pools and auctions because these orders don’t move prices. For example, to move 10,000 shares of a company trading at $10, a seller may reach a deal in an auction to sell for $9.95. The trade shows up on the tape after execution. That’s a whole lot better than putting an offer on the tape for 10,000 shares and watching the price fall to $9.90 before half the shares — or even a single share — is sold.
The NYSE isn’t trying to do anything malicious or radical here. It’s simply trying to keep up with Liquidnet Holdings Inc., Instinet and several dark pools run by Wall Street brokerages including J.P. Morgan Chase & Co. JPM, -2.32% , Barclays PLC BCS, -1.96% and Goldman Sachs Group Inc. GS, -2.03% . The London Stock Exchange LSE, -1.91% already has a midday auction planned to launch later this year.
Supporters of dark pools and off-exchange trading argue that these benefit investors in mutual funds, pension funds, and other big funds that have the girth to participate and that the system improves price discovery by increasing the amount of trading taking place. That’s like saying back-room dealmaking in Washington improves lawmaking. The message in both realms is clear: the public just gets in the way.
Wall Street has traditionally rigged the stock market trading game to favor those who provide big commissions. So, the move to auctions and dark pools designed to create two classes of investors isn’t a big deal.
It’s just the same old raw deal we’ve been getting.
NB:-
Just natural like majority wins or bulk buying always get in front(better treatment and the like).
How shall OPMI response?
Anyone ?