The SEC's rules around trading (today) really prohibit a lot of the "obvious" ideas people have had about how to slow down trading. We have some stuff in the works here, but it won't be public for a while.
That said, we have adopted a construct that we call the "Very Simple Market" that eliminates a number of trading "features" such as hidden liquidity. We think this makes it a more conducive environment for the longest-term investors to trade. We also have a business model that is much more aligned with the long-term investors and companies than most incumbents. We don't seek to maximize our trading volume, so that requires us to make money by helping our customers run their businesses better.
As we say in SV, if you're not the customer, you're the product. This applies to issuers as well.
On your latter point, you've got it right. We don't think we have an exclusive on good ideas, and there's definitely examples where talented founders have found ways to build for the long-term in spite of the existing market structures.
But when was the last time you heard a CEO say that they were able to think long-term _because_ of the markets in stead of in spite? That to me is a key difference
To which extend do you think market fragmentation (as a result of reg NMS) is part of the problem?
If i understand your reference to "hidden liquidity" correctly, you have simple order types and when compared to other venues.
Wouldn't it be better for price discovery, if all US equities were traded in one continuous limit order book instead of across a dozen venues, each with its own funky order types and quirks?
XKCD as usual quite prescient about the problems of standardization. I think pretty much everyone agrees with your solution -- so long as their platform is the one that everyone standardizes on!
The sad reality is that because of these issues (and, to be fair, others) most trading is moving off lit exchanges altogether. For some companies we are talking about 80% or more of the volume, and this would be even higher if not for the requirement that day-open and close auctions happen on the "home" exchange.
We have made a proposal to the SEC to bring this off-exchange activity back into the light of the protected quote, but nothing to report at this time about how, when, or if this will come to fruition:
https://longtermstockexchange.com/resources/docs/LTSE_Exempt...
The SEC's rules around trading (today) really prohibit a lot of the "obvious" ideas people have had about how to slow down trading. We have some stuff in the works here, but it won't be public for a while.
That said, we have adopted a construct that we call the "Very Simple Market" that eliminates a number of trading "features" such as hidden liquidity. We think this makes it a more conducive environment for the longest-term investors to trade. We also have a business model that is much more aligned with the long-term investors and companies than most incumbents. We don't seek to maximize our trading volume, so that requires us to make money by helping our customers run their businesses better.
As we say in SV, if you're not the customer, you're the product. This applies to issuers as well.
On your latter point, you've got it right. We don't think we have an exclusive on good ideas, and there's definitely examples where talented founders have found ways to build for the long-term in spite of the existing market structures.
But when was the last time you heard a CEO say that they were able to think long-term _because_ of the markets in stead of in spite? That to me is a key difference