Ban high frequency trading, ban instant transactions (put them on hold for some time before buying/selling (hours minmum, longer for larger quantities), make the held transactions public, and tax the profits on a time-owned scale.
This would turn "investments" into investments again... you really believe that company XY will do something good? Buy stocks and keep them for few years until they grow. Politican John Bobson dumps his stock of ZX company? Well, now we know before they actually get dumped, and can sell our stocks too.
Buying stocks of a company for 1.7 seconds and selling them back is not an 'investment' by any kind of proper definition.
I'm not sure what value you are getting out of the second paragraph. If some politician dumps a ton of stock X and I go "oh no, I'd better get out of that as well", won't I still be in line behind not only the politician but also everybody who has bots that automatically act on his actions within nanoseconds? It gives you warning that a stock is about to crater, but there's nothing you can do about it without giving someone the power to jump the line, and power like that can only be abused.
> Ban high frequency trading, ban instant transactions (put them on hold for some time before buying/selling (hours minmum, longer for larger quantities), make the held transactions public, and tax the profits on a time-owned scale.
This sounds like a pitch written by a Wall Street lobbyist trying to go back to the minimum-tick days. (Holding large orders is just pure profit for arb firms.)
HFTs/market makers are competing for pennies on the dollar. They do not hold risk (long term), they exist to readily provide liquidity to your buy/sell orders. HFTs can be quite profitable, but that doesn't make them inherently evil.
Can you elaborate why those bans will improve the market and what the issues are with HFTs in your eyes?
These dark pools and private rooms appear to be a response to HFT. To get away from HFT. So HFT appears to be fragmenting the market which is probably not a net good. If that is not the purpose of dark pools and private rooms, then what other purposes do they have?
One of the unique aspects of dark pools (and this can vary by venue) is that orders are segmented according to the source type (e.g. retail, client of the operator of the venue, institutional trader, etc) and the quality/grading of their order flow. As an institutional trader trying to leg into/out of a large position, you'll want many different execution options to help minimize price impact + information leakage + execution time. Dark pools are a great option in which you may have the option to specifically trade against non-toxic order flow (e.g. retail) to achieve better execution.
There are other reasons as well, but these venues essentially exist to solve some very niche problems for institutional trading. Public filings are available for review in case you're interested in the rules of each dark pool. [0]
You are presupposing that there is always a counterparty to trade with. What about sell-side market makers? Those clearly aren't "investments". I your solution, all buyers will pay more and all sellers will receive less.
It does make it much more expensive, and something that people with other options won't want to be involved in. If 'dark room' trading was illegal, Goldman, etc. would exit those markets.
It's true that people break laws, but the extreme idea that laws and law enforcement are therefore useless is obviously wrong. Look, for example, at the Republicans and their allies banning DEI - it's had quite an effect.
This would turn "investments" into investments again... you really believe that company XY will do something good? Buy stocks and keep them for few years until they grow. Politican John Bobson dumps his stock of ZX company? Well, now we know before they actually get dumped, and can sell our stocks too.
Buying stocks of a company for 1.7 seconds and selling them back is not an 'investment' by any kind of proper definition.