Dec. 14, 2022
December 14, 2022 If indeed, the objective is to remove the advantage that high frequency traders (HFT) have over retail investors, then you have to look at the purpose of each groups investments. Most retail investors are not \"traders\" and have somewhat of a longer holding period, measured in hours or days versus minutes. Perhaps one thing that should be considered is doing just the opposite of what is proposed. If instead of driving the price offered down, maybe taking the trading increment back to eights should be considered. The advantages to this are enormous. First, you eliminate the HFT's ability to scalp pennies on trades which leads to artificial volume and liquidity. Second, it would incentivize true market makers to come back into the market and provide stability during times of volatility. After all, who wants to take undue risk without compensation? Finally, for most retail \"buy and hold\" investors, the long term difference in cost would be minimal. This option would truly have the most impact on those trading millions of shares a day who are just trying to scalp a few pennies on each trade. Thanks.