Citadel's Nazarli Says It Is 'Unfortunate' That People Perceive The Stock Market To Be Rigged

Jamil Nazarali is head of execution services at Citadel Securities, a leading market maker that trades in equities, options and interest rate swaps for its retail and institutional clients.

Nazarali recently sat down with Bloomberg to discuss the state of the U.S. market.

"The U.S. equity markets function incredibly well," he started off as saying. "Investors get their trades done better, faster and cheaper than ever before."

Nazarali continued that due to efficiency improvements in stock exchanges over the past years, retail investors save collectively $1 billion a year in costs compared to a decade ago. Nevertheless, there is an ongoing belief that the stock market is rigged and tilted in the favor of high-end trading Wall Street hedge automated trading machines.

Nazarali said it is "really, really, unfortunate" that retail investors hold this view. He reinforced a view that the markets in its current form "function incredibly well," but it is still "not perfect."

He added that the SEC created a committee to explore the stock market and seek out areas where it can be improved and some of the areas that could benefit from changes are margin structures and individual stock circuit breakers, which work "generally well," to turn halt trading of a stock. However, when trading resumes, the circuit breakers don't "work that well."

Finally, Nazarali suggested it is "partly true" that a major flaw in the stock market is that everyone is so fixating on finding solutions to a problem after it occurs rather than in advance. However, it is "hard to predict the future" and "hard to know what will happen."