06.15.22 | Out of the Dark and Into the Light

Warning Sign

Under normal market conditions when liquidity is abundant, intermediation is at its greatest.   Investor orders are filled, cheaply, by brokers and market makers at mid (bid-ask).

Under conditions of market stress, liquidity is less available … and that, which is … is more expensive.   Under conditions of stress, discretionary traders move to lit venues, a process referred to as “flight to transparency.”