6 ms·
Their ATS can only exist by free-riding on the public price discovery in displayed US markets under Reg NMS. They protect their customers from trading at "wrong
by mrchicity 11y ago
Their ATS can only exist by free-riding on the public price discovery in displayed US markets under Reg NMS. They protect their customers from trading at "wrong" prices by letting traders on faster exchanges determine what the "right" price is for them.
As a thought experiment, imagine IEX captured 95% of market share as a displayed exchange. The 350 microsecond delay wouldn't matter since it's applied to everyone and there would be no reference markets for them to price against. It'd just be another market with a slightly slow matching engine. Relative speed still matters so fast traders would have an advantage.