Speed segmentation on exchanges: Competition for slow flow

In 2015, a Canadian stock exchange, TSX Alpha Exchange, implemented speed bump for marketable orders and an inverted fee structure as part of redesign. We find evidence mild improvements in market quality after the redesign, we do not that appreciably segmented retail order flow away from other exchanges. For high-priced stocks, Alpha's users trade off execution size against larger effective spreads redesign adjust their trading behavior manner consistent with this trade-off. The findings suggest bumps may enable exchanges to compete latency-insensitive orders. • Stock intentionally delay instructions using “speed bump”. Speed allow certain types traders. create tradeoff between higher liquidity costs operational simplicity. Traders adapt routing behaviour response bump.