### The best stock exchange – pitch black

Imagine a wall. This wall represents the market for a particular stock, TSLA.

On one side buyers on the other side sellers.

On top of this wall is a crier who announces the bid and offer prices of TSLA after every exchange of shares between a seller and a buyer. The crier announces ONLY the these two prices, not the size of the transaction or the open requests quantities to buy or sell.

On the buy side investors who want to own TSLA walk up to the wall and present their bid to buy.

On the sell side investors who want to sell TSLA walk up to the wall and present their offer to sell.

Neither side knows who is on the other side, nor how much the other side is attempting to transact. Additionally, none of the buyers know how much the other buyers are trying to buy, nor the sellers how much the other sellers are trying to sell.

The wall is completely opaque aside from the two pieces of information – the current bid and offer of TSLA.

Now imagine buyer Bob who want to buy 100,000 shares of TSLA. They walk up to the wall and submit their order to buy. The current offer price of TSLA is \$500.00. Buyer Bob has indicated he will only pay \$500.00 for TSLA. There are currently only 10,000 shares available at the offer of \$500.00 and so buyer Bob gets 10,000 filled of his order. Buyer Bob stands at the wall with his remaining order to buy 490,000 shares.

There were three sellers on the sell side who were offering to sell TSLA at \$500.00, one for 5000, one for 3000 and one for 2000 shares. All three of these sellers sold and walked away from the wall.

The TSLA wall crier now announces “Bid \$499.99, offer \$500.01.”

Buyer Bill now walks up to the wall with his market order to buy 5000 TSLA. Bill has heard the offer of \$500.01 and expects that price (or worse). There are 2000 to sell at \$500.01 and 20000 to sell at \$500.02. As buyer Bill submitted a market order he gets his full 5000 shares but at two different prices.

The TLSA wall crier announces “Bid \$499.99, offer \$500.02”

Seller Sal now wants to sell 500,000 shares of TSLA as the price has risen to his take profit level. Seller Sal walks up to the wall and submits an offer to sell 500,000 at \$500.01.

The TSLA crier announces “Bid \$499.99, offer \$500.01”

Buyer Bob, still standing there with his outstanding 490k to buy decides to change his mind and up his bid to buy to \$500.01.

Bob and Sal, without knowing who either are immediately transact 490,000 shares at \$500.01.

Buyer Bob walks away with his now 500k shares and Seller Sal has decided to walk away too, pulling with him the remaining 10,000 shares he offered at \$500.01.

The TSLA crier announces “Bid \$499.99, offer \$500.02”

And so it goes.

No matter who you are, what quantity you want to buy or sell, you can walk up to the wall, knowing the current bid and offer price and get a fair deal.

Nobody can game you as nobody knows how much you are buying or selling.
Nobody can game the TSLA wall using volume as nobody knows how much quantity is being transacted.
The wall does not announce any kind of order book so scalpers can’t jump in on the quote.

Every exchange must become a dark pool with fixed payment for order flow.