Opening Bell 1.8.19

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Buttonwood Disagreement [The Water Coolest]

To say that the current stock exchange landscape in the US isn't exactly a dog-eat-dog world would be an understatement. Let’s go to the (ticker) tape, shall we? The “big 3” exchanges (ICE aka NYSE, Nasdaq and Cboe) control all but 2.5% of the trading volume in the US which really pisses off a lot of people.

So, as the saying goes, if you can’t beat them ... embrace capitalism and undercut the f*ckers on price. That’s exactly what a cartel of big banks, brokerages and high-frequency traders plan to do, announcing plans to create the Members Exchange or MEMX to compete with the power players.

The marketplace has raised $70M to date and put forth a proposal to the SEC for exchange status.

As is commonplace with an oligopo-, er, "tight-knit industry," complaints have risen about the big 3’s pricing, especially the cost of data feeds. MEMX is planning to go all Scottrade, aiming to win market share with a lower price point.

A history lesson

Other exchanges have attempted to unseat the three amigos to no avail. IEX runs the only "other" exchange in the US … but controls less than 3% of trade volume.

For-profit stock exchanges are a relatively new phenomenon. From the time that the Buttonwood Agreement was inked around 1792 until the 1990s, exchanges were run mostly as non-profits owned by the brokers who manned them.

Shares of NYSE owner fall as Morgan Stanley and Fidelity plan rival exchange [CNBC]

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