Senate Banking Committee - Rules, Day Trading, Investing

 Turf War Plays Out – Day Trading Rules – Senate Banking Committee Hearings

(click above link for more) 12/19/2012

For what you see with your typical day trading software is not exactly what you get – for day trading results that is – think: “40% of the volume in over 3,000 securities was tradet off-board.” How the hell do they get away with that? You would think that all trades should have complete transparency to make the playing field level for all traders. Think again.

“..exchange officials cast aspersions on alternative trading systems, or dark pools, while ATS executives criticized the regulatory structure supporting exchanges.”

“Exchange executives told committee members that the sheer volume of trading done off-board was harming the price discovery process. They suggested that ATSs leaked information and needed to come under stricter regulation.”

These rules that relate to a wide spread of specialized trading systems are not even available to the general public. Nice. And you woder why both traders and investors have been losing trust in the markets since the financial/real estate crash, as reflected in overall volume declines. And most claim there is huge capital just sitting on the sidelines waiting for the economy and markets to change. Maybe. Maybe not.

Credit: TradersMagazine.com

Eric Noll, Nasdaq OMX Group’s head of transaction services

“Eric Noll, Nasdaq OMX Group’s head of transaction services, echoed Mecane. “Our concern is about the primacy of price discovery and price formation,” he said. “To the extent that those are being negatively impacted by current market structure, those issues should be revisited.”

Credit: TradersMagazine.com

Bob Gasser, chief executive of Investment Technology Group

“Bob Gasser, chief executive of Investment Technology Group, agreed. “There has to be some consequence for a system wide failure of the type we experienced with Facebook,” he told the committee. “Our clients suffered. Other broker-dealers suffered.”

“Representing dark pools were Dan Mathisson, Credit Suisse’s head of U.S. equity trading – “He wants the regulators to take a “fresh look” at the system, which dates back to 1972. “Somewhere along the way, market data became a government granted windfall at the expense of the investing public,” he said.”

The day trading rules are about to change? We’ll see, maybe in my life time.
John McLaughlin, Day Trading Coach