TY - JOUR T1 - Trade Shredding JF - The Journal of Trading SP - 9 LP - 29 DO - 10.3905/jot.2007.669797 VL - 2 IS - 1 AU - Lynn Phillips Kugele AU - Robert A. Wood Y1 - 2006/12/31 UR - https://pm-research.com/content/2/1/9.abstract N2 - Trade Shredding — the practice of breaking orders into smaller, multiple trades solely for the purpose of generating market data revenue — has been an ongoing object of concern, comment and controversy. In this research, we address three questions regarding the practice of trade or tape shredding. First, what market dynamics — economic and regulatory — combined to provide a climate that was amenable to and even encouraged trade shredding? Second, while there is virtually no argument that trade shredding has occurred can it be isolated; is it observable in the market data? Finally, the battle for market data revenue is considered to have been a major driver of the market data portion of Regulation NMS. But will Reg NMS' new, more complex formula succeed in eliminating this distortive practice?TOPICS: Exchanges/markets/clearinghouses, legal/regulatory/public policy ER -