There’s a spate of new stock exchanges ready to launch to compete for your trading dollar. LTSE began full trading operations this week. MEMX will begin a phased launch on Sept. 21, and the MIAX Pearl Equities, which runs three options exchanges, will debut its equities exchange on Sept. 25.
In theory, it’s a great time for a new exchange: equity volumes are about 50% higher than last year thanks to the pandemic and the ups and downs in the market partly created by the enormous stimulus efforts from the Federal Reserve and Congress. But do we really need them? “We don’t need them, but they will still get created because it is a way to pressure costs lower,” says Rich Repetto, who follows exchanges at Piper Sandler. The new exchanges are being driven by a desire to hit different market niches, from a group that wants long-term investors, to one that is just looking to create a cheaper place to trade. If you are into ESG (Environmental, Social, and Governance) as a goal for corporate America, the Long-Term Stock Exchange is what you have been waiting for. The MEMX is all about cutting costs. It’s backed by a who’s who of Wall Street firms, including JPMorgan, Goldman Sachs, as well as money managers like BlackRock (which owns iShares, the largest ETF family), and Fidelity. Online brokers Charles Schwab and TD Ameritrade are also backers, as well as global market makers Citadel Securities and Virtu Financial. With all this competition, you’d think the NYSE and Nasdaq would be worried. If they are, they don’t show it. “We welcome new entrants, as we have been successfully competing in the US equity markets for nearly 50 years and work every day to add value to our clients,” Nasdaq spokesperson Joe Christinat said in an email to CNBC.