This is very good advice, and should be done whenever possible. Unfortunately, it isn't always that simple. No brokerage company can survive without accepting payment for order flow in a market where these are paid, regardless of their moral position. In fact, my old company was one of those. They actively took part in fighting against payment for order flow, but still accept these fees in their brokerage division. No trading company that needs to fill orders in the equities world can afford to not play the full game. They must use the liquidity provided in every center regardless of their moral position on dark pools for instance. The market participants are forced to play the game by the current rules. Payment for order flow, IOI's, and order internalization should not be allowed in any form. I am open to suggestions as to how professional brokerage and market making companies can vote with their trades in protest, without sacrificing fiduciary duties.
pm on the date / location of the Bar and I'll tip a few shots with ya.... very good comments, and in all reality, very few traders and established sophisticated retail investors, whether they comment on these threads or not, understand what HF's do. Yes, I agree they attempt to emulate what the NYSE Specialists role was, its just that they do not do that in complete replacement and automation of them, not that that was their objective in the first or second place anyway. I know that those who decry using OOO's (Opening orders only) method of trading their proprietary or leveraged accounts really miss the diminished role of the NYSE Specialists.... HFT's certainly don't provide that paired service and "allow one to trade on the side of the Specialist as he opens the stocks for the days' trading". either way, this is one of the most dynamic, complex, creative and innovative niche areas within the many various niche markets that comprise the American trading horizon. ok, let's toast success....
It can if trades are willing to pay higher fees. If they want to go with the cheapest options, they should not be complaining about dark pools
no, sorry, ioi's aren't just 'pre-arranged' trading by another name. the reason: pre-arranged trades involve zero competition. ioi's, however, can be competed for. you, me and 100 other guys making markets in those books can reject or fill that ioi as we see fit. once more than one person is alerted to the order and can trade on it, it's no longer pre-arranged.
in equities, this is a non-issue even though they are paid there too. most all equity prop b/ds, and even a handful of retail b/d's, don't play this game. you're being insanely hyperbolic and this is obviously false. 'NO equity trading company?'... come on man. 'moral' position on darkbooks? what the hell? this is finance. these are markets. assess the competitiveness or anti-competitiveness of a product for the market and for your pocket and leave morality for priests and altar boys. even if you're talking 'randian morality', you still need to at least make one decent argument how darkpools IN EQUITIES (since this is your contention here) are anti-competitive... which, to date, i've not seen you, or anyone else in this thread make. buyout the investors and broker/trade privately. otherwise, you have to rethink whether what you interpret as 'anti-competitve', or in your case 'immoral', might actually just be competition handing your ass to you. competition defines the rules of competition, not regulation. relying and enforcing the latter to protect you in a marketplace is energy poorly spent, imo.
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