Imagine if the markets were truly transparent....
posted on
Jul 18, 2017 03:53PM
The markets as they're currently constitututed have dark pools and iceberg orders....and obviously short selling.
But let's imagine, just for fun.....its not like anything is going on...even volume of a few hundred thousand (if it was that high) really isn't that much trading and we have no news...so I'm going to indulge my speculative imagination. Come along for the ride if you want, or just ignore this....either way its all good.
Imagine that all the trading was above board....that there was no dark liquidity, no iceberg orders, and that those selling short....that they had to disclose their activity.
You might see 100 lots on the bid we'll say at $1.25....they could be from 4 different brokers, or 5 or 6 or whatever...but you would see it. And on the sell side? What if there was say 10 lots on the ask side at $1.30 but five of the ten were listed as short sales. Wouldn't that be interesting.
It sure would make the market game easy dontcha think....and maybe too easy. That's what I believe...that transparent trading like in my dream situation here....that it would make it too easy. A stock with 1000's of lots available on the ask side....buyers would stay away. And another stock with huge interest on the buy side but scant liquidity on the ask would attract lots of attention.
The market would break down, it wouldn't function I don't think....
Allowing buyers to put in bids for 100s, maybe even 1000s of lots but only showing maybe 10 of them as visisble (iceberg orders) does make sense in my opinion.....and likewise on the sell side when big money players are wanting to dump high....I think it has to be this way....and it makes the market game much more intriguing.