The sandbox scares NASDAQ

Matt Levine describes a new system in NASDAQ to systematically reveal part of the trade book, for fairness.  Thi is NASDAQ reading my blog and knowing we are about to kill the monopoly licenses enforced by regulation.  NASDAQ has to compete in a competitive 'token' environment.

Here's a story about the "Intellicator Analytic Tool," a tool that Nasdaq Inc. has proposed to give option-market color to its customers:

Every minute, it would spit out numbers corresponding to a part of the options market and show whether investors in that market segment were bullish or bearish.

While it wouldn’t reveal the identities of investors, the Intellicator could reveal the “customer type” of buyers or sellers in thinly traded markets. For instance, it could show whether a trade was initiated by a small investor or big money manager, by identifying certain traders as “professional customers” who place larger volumes of orders each day.

This is useful color, for the recipient of the color, which means that it will make the subject of the color feel aggrieved: 

But if the Intellicator reveals a small order was initiated by a big investor, others could infer that the investor is about to buy or sell many options, potentially affecting the price of the underlying stock. An algo trader could quickly buy or sell that stock, resulting in a worse price for the investor on the options.

It all just feels so much more naked when the computers do it.