December 13, 2015
Dear SEC,
I fully support the approval of the IEX exchange, here is why:
I can tell you from personal daily trading experience that our current markets are not created equal for all investors. In fact, it is quite clear that certain entities with substantial financial backing and high speed equipment carry a distinct advantage.
I trade very actively, buying and selling US equities throughout each business day. I've noticed consistently that when my orders are sent from one of my brokers to an internalizer (such as Citadel), the result is often not in my favor. Please allow me to provide some examples:
For market orders, by the time my order is executed, the market has already moved and my fill price is worse than expected. For limit orders, I often enter an order and the market instantly moves away from my bid/offer, forcing me to pay a worse price or not get a fill. And sometimes when I enter limit orders where my price is the prevailing best bid or offer, I will instantly be joined by other bid/offers at the exact same price, and when an execution occurs at my price I will not get the fill. It usually requires price to trade all the way through my level to get a fill. So, even though I was the first one in line at a given price, another entity is able to steal that liquidity right out from under me.
The above examples essentially represent a legalized form of front running, as these market participants (internalizers) receive advance knowledge of my orders and immediately act in their own best interests to generate a profit. I don't understand why this is allowed to exist in today's market, and it needs to be stopped immediately. At the very least we need an exchange that we can trade through which will prevent certain entities from front running our orders. The answer is the IEX exchange, which is designed to level the playing field for all investors and create a fair level of competition.
I have faith in our capital markets system and the ability of the SEC to protect investors. I urge the SEC to act in the best interest of all investors by approving the IEX exchange. Thank you...
Best Regards,
Michael Quinlan