@Wiillaah said in Bid & Offer Zones:
As things stand there simply isn't enough active traders to provide competitive pricing across all listed players.
The solution is market growth; the only way to provide both sufficient liquidity & market depth is by generating far greater demand from both new & existing users.
Why is this not happening now? Many contributing factors amongst which are many current users are avoiding adding further funds to avoid triggering yet another round of intrusive EDD (the current system is overly intrusive & time consuming), new users are being driven away by an overly volatile market that has insufficient explanation & training resources, this generates bad trustpilot/social media/word of mouth reviews further dissuading new entrants, MM either not understanding or executing their purpose in a meaningful way, FI management repeatedly stumbling from one self inflicted disaster to the next & never allowing the platforms to settle around a coherent direction, all this on top of the significant external economic CV shocks that mean people are understandably hoarding their available cash to face an uncertain future.
I believe that longer term the new dividend structure & full OB'S based on NASDAQ tech will provide the launch pad for this market growth but it may need further short term stimulus in the form of promotions, similar to the current 5X IPD & more effective MM liquidity support. It's in no ones interest to have holders stranded in illiquid players, often for months on end, however the 5X IPD promo proved that significant liquidity returned immediately, across all sectors of the market, when these players were eligible for a 10/20p bonus.
It's also clearly undesirable to impose an artificial valuation, as the current bidding zones does, as liquidity simply evaporates. Full OB's allow players to trade at their correct market price (as determined by supply/demand & market sentiment) albeit with some short term volatility until market depth is achieved. Promotions & MM can be used in the short term to support the OB principle but to keep neutering it's main benefit is simply counter productive & causes more harm than good IMO.
Whilst it may prove a rocky road, at least in the short term, I am firmly convinced that the platform is heading in the right direction & just needs to avoid any more self inflicted disasters in order to succeed.