US Market History
Many events have occurred in modern history that have created what many feel is a need for a Trade-At Rule. Common practices such as Payment for Order Flow (POF) are causing Exchanges, Regulators and Traders to analyze the current structure of the market and to consider implementing a Trade-At Rule. Payment for Order Flow is the agreement that exists when a third-party pays a broker to send their orders to them, rather than to the open market. This is a cunning strategy we are all well aware of, but yet there seems to be quiet acceptance. This type of payment incentive developed over time with the introduction of Alternative Trading Systems (ATS) and rapid improvements in computerized algorithmic trading. This type of payment structure leaves traders fighting for market share. Change in Markets due to Advancements in Technology The combination of ATSs and other off exchange venues along with computerized algorithmic software have had a huge impact on US Markets and how securities are traded today. Daytraders today dream of a level playing field and efficiency in the market. The Stock Exchange of today is not occupied by clamorous traders shouting on the floor while waving papers in the air. This market today is an age of computer algorithms scanning all available exchanges to buy and sell desired shares in fractions of a second. Many of the trades occurring are on an off-exchange venue such as an ATS, an ECN (Electronic Communication Network), or a Dark Pool, where they can act like an exchange but adhere to their own rule set. These off-exchange venues often offer price improvement, fast execution, and decreased trading costs for investors, making them a desirable way to go. This is where a conflict of interest could develops to the firms processing these orders. Brokers can either route their orders to an off-exchange venue offering the best price with the least costs, or they can send their orders to the venue that pays them the best rebates. The introduction of various ECN’s, ATS and Dark Pools has contributed to the development of a fragmented market that now consists of thirteen US Stock Exchanges, over forty dark pools and several ECN’s to choose from. With so many choices, it is no wonder that people are talking about liquidity, paying for it, and wondering how to keep it flowing within regulations, and in an ethical manner. While traders are fighting for market share, and wondering where to find liquidity in the market, most traders are also wondering if it’s time for new regulations, or are they long overdue? Headquartered in Chicago, Great Point Capital, LLC, is a member of FINRA and has been serving the trading community since 2001. Our mission is to be the leader in the equity day trading community by giving the best traders the tools and support to make the most of their trading careers. Contact Great Point Capital, LLC today, in either our Chicago Office, or our Austin Office, to learn more about how we can successfully trade together with high performance results.
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While the pros of trading from home are obvious, flexibility to be available for a variety of personal reasons, there are many benefits to working from the office of an experienced trading firm. One of the biggest benefits of working with your firm’s office would be the outstanding IT support that comes with it. Every trader must have reliable high speed internet, which is pretty easy to come by these days even in remote locations. If there happens to be a residential outage, however, you are at the mercy of your local provider. When trading from the professional environment of your firm, you will enjoy reliable backup systems, and alternative computers available if you have a hardware malfunction. A smooth-running machine with a reliable battery backup is imperative to complete your trades on time. In addition to top-notch IT equipment and support, one of the best advantages of working in-house with your fellow traders is being surrounded by experienced traders. Each seasoned trader has developed their own systems for observing and getting a feel for the market, which is hands on learning you cannot acquire from a screen. This mentoring is valuable especially to a new trader. You learn to develop your own strategies and feel for the market when your experienced colleagues and mentors are within the same office. Unless you need the flexibility of trading from home, we feel there are no cons to working from the firm’s office. Of course, if that flexibility is a matter of necessity or you are experienced enough to have your own proven strategies to trade from home, Great Point Capital is here to assist you. We employ several traders in-house at our two national locations, and we also employ several seasoned traders working remotely from their home location. With Offices in Chicago, IL and Austin, TX, Great Point Capital is poised to assist you and your market strategies, from any location. We offer the Takion Software Platform, utilizing algorithmic smart order routing, advanced code and connection to exchanges, and all major dark pools. In addition to access to Takion, we provide our own proprietary Instant Messaging (IM) Software, giving you the ability to collaborate with the experienced members in your firm. This gives our remote traders valuable insight from other experienced traders that you would not otherwise have. Great Point Capital, LLC, offers all of the same benefits to our remotely located traders as we do for those working in-house. You’ll be trading with bigger buying power, enjoying aggressive payout structures, and join a team of best traders in the business. With our two national locations, we are positioned to trade with you on site from either one of our modern offices or remotely from any location. Contact Great Point Capital, LLC today, in either our Chicago Office, or our Austin Office, to learn more about how we can successfully trade together with high performance results. Before the Securities and Exchange Commission, (SEC), approval earlier in 2016, IEX founders Brad Katsuyama and Ronan Ryan faced some strong opposition from several incumbent exchanges that started a campaign against awarding approval to make IEX the thirteenth stock exchange in the United States. Both the NYSE and NASDAQ wrote detailed letters to the SEC, asking for them to not approve the license for IEX, claiming that it is against regulations and questioning the circumstances for the time delay.
The unique “speed bump” created by installing a 38-mile fiber optic data cable while disallowing HFT’s from installing cables adjacent to their server, creates a level playing field for all. Other trading venues allow HFTs to front run orders by using predatory algorithms while connected to their servers to gain a speed advantage in the marketplace. Even a fraction of a second is all it takes for a trader to lose their shares on order to a front-running HFT. While the concept of fair trading is an easy one to agree with, firms that are making millions in profits unbeknownst to the investor may not be so thrilled about fair and equitable. IEX is Gaining Respect and Growing in Size In June of 2016 the SEC agreed with IEX and granted approval in spite of the opposition. IEX has swiftly gained the attention and the approval of some of the biggest players on Wall Street. When considering the billions of dollars that flow through all US Stock Exchanges on any given day, it seems very unfair that only a select few are in an advantageous position to skim thousands in profits from the trades originated elsewhere, just because they have installed the finest and best cables. As traders, investors, regulators and the general public gain awareness, IEX gains respect. Enjoying an unprecedented growth rate for a new start up stock exchange, IEX is breaking new ground and with great relief to day traders everywhere. Great Point Capital, LLC offers buying power, access to Takion software platform with excellent IT support, and the benefits of working with an experienced team. We are pleased to currently trade approximately 10% of our volume on IEX, the Investors Exchange. IEX, The New Stock Exchange
IEX was given the final approving nod by the Securities and Exchange Commission, (SEC) earlier in 2016 to become the most recent and thirteenth stock exchange of the United States, and is the first of stock exchanges to offer transparency for high frequency traders (HFT’s) and day traders alike. Day traders have typically been at the mercy of high frequency traders, whose trading volume comprises approximately 50% of all of the market trades combined. IEX does away with the practice front-running orders by HFT’s, a common practice for many high frequency trading firms. Front-running refers to the practice of HFT firms installing direct data cables to exchanges, allowing them to see other purchasers’ orders seconds prior to the Securities Information Processor, (SIP), completing the trade. This has been a big frustration for day traders trying to place buy and sell orders, when they find that the current available shares are immediately unavailable within seconds of placing the order. Motivation for a Change In the New York Times bestseller, “Flash Boys”, author Michael Lewis raised awareness to the predatory practices of some HFT’s by exposing these and other questionable trading practices. Traders have been frustrated from competing with HFTs in an unbalanced, and marginalized environment. IEX founders, Brad Katsuyama and Ronan Ryan decided to do something about it. The main goal of IEX is to protect all investors. Founders Brad and Ronan uphold their ethical values by enforcing the regulations of NBBO, to offer the best available price when buying and selling securities. Brad and Ronan found a way to counteract the attack brought on many predatory algorithms; install a 38- mile cable, and do not allow HFT’s to co-locate equipment adjacent to their servers. While this seems like a simple solution, IEX is the first to unveil this groundbreaking technology which establishes a fair and equitable trading environment. In an interview by Trading Venues from November of 2016, Ronan Ryan states that “we have always said that we are not anti-HFT but we are against the creation of advantages for some to the detriment of others.” Brad Katsuyama states In the same interview that “For us it’s about educating the end investor and rallying them together in a fair and totally transparent way that is aligned with their interests, so that they want to trade on IEX”. The Investors Exchange and their novel approach to trading is changing the way that traders buy and sell, while alleviating a lot of headaches. Great Point Capital, LLC offers buying power, access to Takion software platform with excellent IT support, and the benefits of working with an experienced team. We are pleased to currently trade approximately 10% of our volume on IEX, the Investors Exchange. The Securities and Exchange Commission gave the approval earlier this year, in June, 2016, for IEX to be approved as the thirteenth stock exchange in the United States. IEX began trading as an (ATS), an Alternative Trading System in October, 2013, and employs the same time delay technology as an exchange, that it practiced as a dark pool. IEX offers a transparent market environment to Day Traders, who have historically been at the mercy of HFT’s front-running their orders.
Several HFT firms operating with surreptitious algorithms have the advantage of seeing orders from other traders seconds or even micro-seconds prior to the SIP (Securities Information Processor) being able to process them. They accomplish this by installing and utilizing high-speed fiber optic cables directly linked to certain stock exchanges. This gives those HFT’s the ability to snatch up other buyers’ orders just in time to re-sell to the original buyer at even a very slightly higher price, thus altering the NBBO (National Best Bid and Offer). The founders of IEX, The Investors Exchange, Brad Katsuyama, and Ronan Ryan, developed a system to counteract this all to common practice by installing a 38-mile fiber optic cable for processing their orders. This creates a 350-microsecond delay in the arrival and departure of orders, which may seem miniscule, it is just enough time to allow traders to complete their orders without fear of a predatory algorithm from an HFT blocking the confirmation. They also do not allow trading firms to co-locate equipment adjacent to their servers, creating a level playing field for all. This “speed bump” gives day traders, and even other HFT’s , the peace of mind in knowing they are not falling prey to the exploitive software that is all to prevalent in other exchanges. Most day traders agree, they can breathe a little easier making trades on IEX. Great Point Capital, LLC offers buying power, access to Takion software platform with excellent IT support, and the benefits of working with an experienced team. We are pleased to currently trade approximately 10% of our volume on IEX, the Investors Exchange. |
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