elecengin

The answer varies for small and large orders (and even by share price) For most retail investors that use something like Robinhood, the average order size is small so a flat $5 fee would be way worse.

Apologies if you already considered this, but make sure you consider execution costs. Depending on your type of strategy and selection of stocks, it may be a major determinant of the success or failure of the strategy.

https://www.bloomberg.com/view/articles/2017-08-25/insider-t...

There are similar regulations in NYC (and I think most of the US, although it is at a local level) that mandate customer bathrooms although they do not sound as strict. For example, small coffee shops (less than ~15 seats) frequently have no customer bathrooms.

Cutting the start up costs increase the range of profitable business opportunities.

My favorite question: "How long is the contract for?" (the SEC reps look to each other, and then respond...)

"There is no term."

"And the bidder is committed to storing all generated data?"

"Yes."

An article on the trend: http://qz.com/355848/wall-street-is-hogging-the-peer-to-peer...

"According to Ericksen, the ability for EMV transactions to continue as usual without the card remaining dipped after the creation of the cryptogram is actually already an existing EMV process, but it is just not widely used. With the implementation of Quick Chip, no additional testing or certification is needed from a Visa or EMVCo point of view, there are no changes to the process and the technology is inherently EMV compliant."

http://www.pymnts.com/news/emv/2016/visa-puts-the-quick-into...

Worth shouting out to Lucera - I have met the CEO and he is a really thoughtful technologist. They are doing some awesome work bringing AWS-style computing to the low latency space. Some interesting details on their deployment: http://www.enterprisetech.com/2014/02/20/amazon-cant-catch-l...

You could argue that these are direct competitors of IEX and therefore have a vested interest in preventing the new exchange - or you could argue they are best suited to see the holes in the application.

Keep in mind that previous exchange applications have went through without this level of discussion. You could argue that this is because the other exchanges are "scared" of IEX. Or... consider the possibility that IEX's application has some faults. For example, much of the focus has been on IEX's smart order router not following the same rules as all the other exchange participants. The argument is too nuanced to summarize here... but you should never decide an argument based on number of responses!

The SEC seems to enjoy "experiments" - the large tick pilot (testing variations on requiring some small cap stocks to trade in increments larger than a penny) is an example of a massive upcoming one. While the large tick pilot suffers from many things - a huge cost to brokers for a dubiously structured experiment - at least it shows a willingness for the SEC to attempt structured experiments. This should be no different.

P.S. For those interested in Sweden - a report considering a transaction tax in Canada that discusses it: http://www.publications.gc.ca/collections/Collection-R/LoPBd...

First - a quick explanation of what these market makers do. Every security is primarily listed on a single exchange. In the US, this is dominated by NYSE and NASDAQ. Any listing exchange assigns market makers to the securities that it lists - these firms guarantee that they will both offer and buy the stock within certain limit and pricing restrictions. In return for this responsibility the market makers get price breaks and other preferential treatment. NASDAQ never had a floor, so these were just designated firms you could (in the early days) call. NYSE, on the other hand, assigned this responsibility to specific individuals from firms - all in one building on a single trading floor. Once the markets electronified, it was easier for the NASDAQ market makers to adapt and become electronic and more automated as well. As NYSE held on to the old model of individuals on the floor, they attempted to justify it - mostly by spreading distrust of computers. (Distrust which has proven partially justified - see the Knight Capital meltdown a few years ago.) Despite their arguments that the humans are adding to the stability of the market, the reality is the humans are doing less and less. For the last 5 years at least all floor brokers and market makers are managing most of their orders electronically with the help of "upstairs" - other employees of the markets makers / floor brokers who are upstairs. Furthermore, the benefits that come with being a market maker apply to some of the firm's electronic business as well - effectively making the floor presence a cost that is made up off the floor.

TL;DR - The NYSE floor is a joke. This just proves it.

While Big Short doesn't seem as factually challenged as Flash Boys, it is over-simplified. Either Michael Lewis falls short of his goal of producing an unbiased representation complex issues in a "pop non-fiction" form, or his goal is different and he is a biased observer forming a cohesive story from a cherry-picked selection of facts.

I am waiting for the article that tackles the issues at these branch offices head on.

Due to to the lower amount of liquidity (inventory available for someone who wants to buy/sell), fixed income (bond) markets tended to be traded traditionally - by negotiating with a number of firms individually (whether electronically or over the phone). These traders are extremely worried about someone hearing about their order and trading ahead of them (the actual "front-running" that Flash Boys accused HFTs of doing!) Therefore, they want to carefully release information about their interest in buying/selling to brokers they can trust.

These markets are stubbornly difficult to automate. Attempts at creating open markets where participants can trade anonymously with other participants have mostly failed except in the most liquid fixed income markets. Even though treasuries are some of the most liquid bonds "on the run" (recently issued), other maturities can be extremely illiquid.

http://cdn.batstrading.com/resources/release_notes/2012/BATS...

This abuse of the term completely confuses the entire debate.

For "kind of fast" - 10-100 microseconds - there are a variety of brokerages that can get you started with costs of approximately $1000-10,000 a month. This is rapidly changing though - the exchanges have been continuously increasing the prices of their market data to the point where consuming the entire US equity market proprietary feeds costs around $50,000/mo in licensing.

This is a very strong statement with little support. I agree that some competition among exchange operators is important, but how do you justify exchanges like CHX, with approximately 1% market share?

I am not sure how to respond to your comment regarding front running without more detail. Many sources have already debunked the Michael-Lewis-style argument regarding front running. Where do you see front running? (Using the proper definition of trading ahead of a customer order based on knowledge of that order)

In this current, though, we have three major operators with 2-3 exchanges each - many with single digit percentages of market share. I suspect that the savings in execution cost due to competition are vastly overwhelmed by the increased cost of infrastructure for most market participants (excluding the largest firms).

In fact, the fragmented market results in huge costs (4 datacenters worth of infrastructure, low latency connectivity, etc) In reality, most market makers would vastly prefer to simplify this away. This is one of the reasons many traders have moved to alternative markets that have fewer trading venues (for example, many futures and options trade primarily on a single venue)

Maybe just abruptly quitting was the only way she could see to resolve a knot of dependencies that seemed impenetrable. If she has the resources to attack the knot from that angle, then there is no shame in it.