Another idea (sans - or in addition to a tax) to improve the signal / noise ratio of the markets: mandate that all B/Os put out there have a TTL of 5 seconds or until they are hit.
So if you Bid at X, you can't pull that bid 10 microseconds later. You can't quote stuff / probe with orders you never expect to get hit. You can't create the appearance of 'market depth' where none exists at all.
So if you Bid at X, you can't pull that bid 10 microseconds later. You can't quote stuff / probe with orders you never expect to get hit. You can't create the appearance of 'market depth' where none exists at all.