Registered: Aug 2010
10-09-12 02:04 AM
Quote from JuniorCTA:
actually the NYSE RLP is making it so more of the retail flow hits the lit public markets instead of going directly to a wholesaler ( getco, knight, IB's TH)
"Under the exchange’s programs, market makers will be allowed to post hidden quotes in sub-penny increments that may only be traded against by qualified retail brokers. The plans’ detractors noted this was a violation of the SEC’s ban on sub-penny quotes, which the regulator has noted could discourage traders from posting limit orders."
They just say "market makers"; they don't say whether this is just any guy sitting in his basement making a two sided market or whether it's designated market makers who're able to post these quotes. It seems like they're implying it's designated market makers.
Also, I don't see how their program addresses the SEC's views about wholesaler interception of flow if the flow is just headed to some designated market maker on the NYSE. Have we all forgotten the days of the crooked specialist, his bogus book locking, and suspicious "price improvements" on large block fills? Why do we want that guy being the equivalent of a wholesaler, but on the NYSE instead -- NYSE commission rates are terrible for a Joe Blow retail liquidity remover on a broker like IB. At least the wholesalers are dirt cheap. What is the NYSE RLP solving in terms of flow interception? The only thing I see it solving is the problem of their declining market share.