High Speed Trading seems to be the outrage of the moment with the Feds. Do you all see material threats looming for KCG’s business, or is the stock price being whipped around more by association with the purported “bad guys”? Your observations appreciated…thanks
Really it is impossible to say for sure but I have a hard time imagining a situation where increased scrutiny from regulators can be good for anyone other than those who want to take market share from current participants. It is a negative that is impossible to quantify.
You know, I don't claim to really understand all or even most of the issues but I would like to make an argument.
Could it be that the more established players are worried about the new people making markets and making relatively new products such as ETF's actually workable? These new exchanges such as BATS and ETF's actually make trading more efficient. They are doing so outside of the old established exchanges and are based in places such as Kansas, Texas, Illinois and New Jersey rather than New York.
The fact that these alternative venues and innovation are taking place outside of traditional money centers also creates a potential political dynamic. If I were a Kansas or Texas politician I sure wouldn't view this effort to put down new venues that are competing in the marketplace.
Just an argument. Might be valid, might not be but I do know that established players do not like innovation from new players in any industry.