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short update on new super soes system.
positives:
- should help out a lot as far as normalizing
the spread, the spread will come back to
positive to zero and no negative
and there should not be
any crossover markets in there anymore.
this will open up an opportunity for mm
to fast arbitrage any mispricing fast and
the market will be normalized
- should normalize ecn vs mm
market. the problem "dual" ecn vs mm market
should be corrected by this new system
- faster execution and better fills for traders
overall. smaller spreads and less noise in the markets.
- manipulation will be a little bit harder to accomplish
at the inside market and mm will have to adjust their
techniques.
- noise should decrease a bit as the market
normalizes itself and becomes more efficient.
- desc. traders can get back to reading
L2 screen now with probably even better
results then before decimilization.
- systematic traders will get a lot faster fills
and less slippage on their executions.
negatives:
- however market makers now will be able
to execute orders and large size in full auto,
fast and furious. sizes might increase at
the inside market which is not a big deal.
- in general super soes will result in larger
profits for mm from market friction.
as the market becomes more efficient speculation
will become a bit less profitable and mm will become
more profitable.
- mm will be easier to accomplish. but that
will create competition between the market makers
and make market making business even
more competitive.
overall super soes is definitely a major relief
from the problems that decimalization
created. the market should normalize
quite a bit and the main thing:
THE MARKET WILL BECOME A LOT
MORE EFFICIENT ( at least on the order
processing system side ). agents reaction time
will be reduced as market makers will be able
to react faster to new information intake.
information factoring will take less time
which will increase market efficiency.
inefficiencies will be taken out faster but
the market rule base will not change on that...
overall it's good news for everybody.
the market will become a lot fairer :-)
hope that helps.
bilo.
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