> How are you planning to make big trades go slow? I mean, mechanically?
Sure, why not? I mean, impose either on a broker-level or on an exchange-level that if an account which holds 100K shares of X makes a trade of X, it will be 3 months between clicking "place order" and when that trade actually gets put into the order book. But if an account that holds 1 share of X makes a trade of X, it goes into the order book as soon as they click the "place order" button.
Optionally, also make the order book publicly visible and anonymized.
Optionally, also make pending delayed orders to go into the order book publicly visible and anonymized as well.
Your restrictions wouldn't really work on the broker level: people would just shop around to get a different broker, or just connect to the exchanges directly. (After all, that's what brokers do.)
You'd also have to apply the same treatment to all derivatives. Especially in-kind settled futures.
You'd also need to take dark pools and internalisers into account, ie people trading outside of the exchanges.
You'd also need extra rules that would prevent people from splitting their portfolio over multiple accounts.
How would you deal with eg indexing mutual funds that are held by retail investors? Presumably you want retail investors to be able to trade as fast as before, and I also assume that you don't want to force retail investors to do all their investing in individual stocks. Now, if money is flowing into a index fund, should they be allowed to buy more stocks?
I specifically picked indexing funds here, because they don't trade because of any information they got: they just want to mechanically hold the index. I also specifically picked mutual funds, because ETFs typically don't _trade_ in the traditional sense when money comes in or goes out.
You'd also have to enforce your delay globally, as otherwise people will trade in other countries.
And, after you fixed all those issues, my question remains: who would trade with all those retail traders? Institutional trading on exchanges would largely cease.
Sure, why not? I mean, impose either on a broker-level or on an exchange-level that if an account which holds 100K shares of X makes a trade of X, it will be 3 months between clicking "place order" and when that trade actually gets put into the order book. But if an account that holds 1 share of X makes a trade of X, it goes into the order book as soon as they click the "place order" button.
Optionally, also make the order book publicly visible and anonymized.
Optionally, also make pending delayed orders to go into the order book publicly visible and anonymized as well.
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