New stock market for long-term investors/reducing high-frequency trading

Excellent. Another dark pool for people who think that they are safe. There are already have a bunch of these, Crossfinder, Liquidnet etc.<p>Here's how you game them without being detected. Have your long term hedge fund/mutual fund department set up an connection to that market. Make sure that you only do long term investing on these venues (e.g., buy blue chip stocks that have low PE) so that they don't ban you.<p>Now you feed the information about displayed liquidity on high volatility stocks that you are interested in trading (e.g., small biotechs) from those exchanges. Especially this new one that isn't even a dark pool but has displayed liquidity.<p>Now next you use that information to front-run the mutual funds who are trying to execute their VWAP in other exchanges such as BATS. Most investors don't have access to dark pools and dark pools aren't obligated to conform to NBBO, so you could get cheaper shares elsewhere and sell when the VWAP is reported in the next hour/end of trading day by dark pools.<p>Other way you can play this is play the liquidity rebate game. So much rebate, $.14/100 shares. Just trade C all day long, high liquidity, low slippage. Offer and buy back at same price as long as C doesn't slip too much. Guess who's paying for the rebates, the mutual funds who's taking the liquidity. Wall Street, what a scam.

I like that this innovation is market-driven and introduced as a competing alternative, rather than imposed on existing markets in the form of regulation.<p>It will be interesting to see if this market provides better pricing for non-HFT participants.<p>The HFT outfits claim they net out to better pricing for all ("liquidity benefits"), but that's somewhat hard to swallow given that they're acting as giant money sinks on the market system.

"The ECN is aimed at institutional investors such as mutual funds, hedge funds, pensions and endowments."<p>Here's a better solution for us poor people: <a href="https://personal.vanguard.com/us/funds/snapshot?FundId=0085&#38;FundIntExt=INT" rel="nofollow">https://personal.vanguard.com/us/funds/snapshot?FundId=0085&...</a>

Am I the only one who thinks this is pointless? I don't trade billions of dollars of equities, but I am a long-term investor.<p>One of my big rules as a long-term investor is that I can't sweat the 1/8ths and 1/4ths (borrowed from Philip Fisher). The time I spend worrying about these high frequency traders getting a few extra cents out of me is time wasted finding great companies that are selling at a discount.<p>Sure... Its annoying, but if you really are a long-term investor a few tenths of a percent won't kill you.

What exactly is the incentive for reducing high-frequency trading? People are offended that computers can make investment decisions better than humans? Computers making trades is not "really" investing?<p>Markets are based on trading. If there are no trades, there are no markets. If you want to buy 1000 shares of ABC company, and nobody has 1000 shares, guess what, the trade is not going to go through. This is what will happen on a restricted market.<p>Similarly, high-frequency trading means price corrections occur more quickly, meaning that when you buy or sell security foo, it is more likely at the correct price. Now you can argue that nobody really knows the correct price, but that is orthogonal. (Computers make mistakes, but so do people. There are some markets that are still not made on exchanges, and they are subject to the same whims that the equity markets are. Computers are buggy. People are irrational.)<p>My guess is that this market is for people with a lot of money that like to talk on the phone with bankers. They will get a "safe" investment (or so the dude on the phone says), and Credit Suisse will get a nice cut. Hint: whenever a bank invents a product, the main idea usually revolves around them getting a cut.

I think Credit Suisse is just spreading FUD, so they get people to trade on their own market, instead of some upstart HFT firm. Every new rule and game is just another money making opportunity for a opportunistic firm.

Actually since it is aimed at institutional investors such as mutual funds, hedge funds, pensions and endowments this will force you to buy mutual funds instead of being an individuall long term investor.

I wonder how this is different from, say, Posit?

HFT has a negligible effect on long term investors anyways, its all on the the underlying company.

How can shares of a particular security have two different prices on two exchanges without a horde of very smart people rushing in to arbitrage?

Doesn't Credit Suisse have pretty active HFT desk?<p>Just another way to shaft their own customers, isn't it?