10:19 AM
An Order Cancellation Tax on HFT Would Curtail Deceptive Quoting
Sean Hendelman, CEO of T3 Live
We are not necessarily advocating increasing taxes rather we are operating under the assumption that the government needs to raise revenue and wants to do it by taxing Wall Street. To that end, there is a more effective alternative to the “trader tax” that also has the positive result of working toward greater transparency in the equity markets.
While the mechanics of the equity markets are under constant evolution with the consistent goals over time of increasing speed of execution and advancing price discovery, the major changes seen in the last decade have not come without drawbacks.
The prevalence of disingenuous quoting on the visible book is extremely high and we propose an order cancellation tax to remedy this detriment to the financial markets. While most retail investors probably have little concept of what high frequency trading is or its impacts, active equity traders have seen its pronounced imprint on the markets.