Jun. 09, 2022
Good morning Chairperson and Commissioners. My name is Ivan and I am a retail trader. Long term for about 20 years and short term for almost 2 years now. What prompted me to reach out to the SEC at this time is to add a retail voice of opinion. I am sure institutional traders are extremely vocal where as we retail traders are typically not. I (and most other retail traders) feel that payment for order flow isn’t as much (if at all) of a problem for us. Most of us feel the arrangement that allows brokers to offer us free commission trades more than covers and compensates for the possibility of a 1 or 2 penny better fill. We don’t trade millions at a time where a better fill would actually save us money after accounting for commissions that would be put back in place due to potential PFOF legislation. What does make the market illiquid and extremely non transparent for RETAIL traders however, are dark pools. Why is the SEC not banning dark pool transactions? Only institutions participate in them. Hundreds of millions to billions of dollars per day are traded in dark pools. Why? Allowing this to continuously occur gives institutional traders yet another edge over retail traders. Every day, institutions purchase and/or sell large transactions off exchange in dark pools. This allows them to buy or sell WITHOUT affecting the general market where we trade. They make side deals with each other and we don’t find out what they are for days. This material information that is kept from us daily is WAY more important than payment for order flow! Why is an institution allowed to buy or sell $5 million in shares off exchange in a single transaction and not have the stock’s price go up or down even 1 penny on an exchange? How is this transparency? How is a dark pool good for ANY retail trader? I would love to hear ONE benefit of a dark pool for a retail trader. For the life of me I can not see one. Dark pools are secret societies for wealthy family offices and institutions where their transactions are purposely hidden from retail which allows THEM to get better fills. Why do they still exist and non transparent volume continue to grow!?! The only reason I can fathom is for institutional traders to have yet another tool in their bag where they have an edge over retail. Don’t you think enough is enough with dark pools already? This link is a simple summation of Dark Pool pro’s and con’s. There are no pro’s for retail traders: https://www.investopedia.com/articles/investing/060915/pros-and-cons-dark-pools-liquidity.asp I would love to hear the SEC’s viewpoint on dark pool trading. Thank you for hearing me out, Ivan Romero