To anyone, but particularly those who are trading via algorithms: I'd be exceptionally careful at the open tomorrow morning. From all I've been hearing of the various tests that went on yesterday, Regulation NMS may very well arrive with bad quotes, locked/crossed markets, and both trade-throughs and price discontinuities on a major scale, at least initially.
On a more comical note, if problems arise (and they may not, but I suspect that they will), it will undoubtedly provide a most fertile soil for conspiracy theorists various and sundry.
Some serving suggestions:
1. Regulation NMS, though well intended by heroic regulators, has been co-opted by various groups*!
2. Regulation NMS is being sabotaged by various groups* in order to avoid the new (and ostensibly 'improved') trading rules!
3. Regulation NMS is just another in a long line of ploys to separate the "little guy" from what is - of course! - rightfully his: the opportunity, nay, right, to access all quotes posted by all market participants and centers - for free and at their expense technologically - and, most importantly, without risk of adverse movement. Loss, you see, is utterly of, and evidence of, "their" doings.
Personally, I delight in the unintended consequences of market tinkering by bureaucrats, and believe that such an initiative will simply...indeed, characteristically...result in the opposite of its stated intentions: the pushing of meaningful, interactive liquidity back onto desks (e.g., over the phone) and when some of it does find its way into electronic markets, that such will largely take shape in hidden/nondisclosed/reserve order types.
Bon appetit, statists.
:-)
e
*Various groups, including but not limited to: Wall Street (as a consolidated entity); market makers; specialists; "them" or "they"; short sellers; hedge funds; a "Plunge Protection Team"; non-specifically attributed "speculators"; manipulators; "Sith Lord(s)"; "big boyz"; Jews; and/or "terrorists." |
