Single point of failure is a simple justification right off the top of my head. What happens if you have a critical failure that brings down an exchange for several days?
As a counter I had some VW shares I couldn’t access for 6 months because they were moved to another exchange. 20 calls to the broker to find out what had even happened. Eventually I was able to sell them.
Well, your first problem was investing in VW (KIDDING!). But seriously, I usually stick to self-serve stock purchases. Was this a situation where you had to contact a human to make the buy in the first place, or was it that you bought it yourself, then VW changed up their infrastructure and inadvertently locked you out?
Self serve, one one of those trading sites. No human contact, until the site wouldn’t let me trade the shares. I think the exchange changed up things and I am buying from another country so communication issues etc.
I checked my email history on it. There isn't much but from what I can tell the exchange was changed that they were traded on but there was also a change in back-end broker and there was a delay of them moving the shares to the new back-end broker. So maybe the change of exchange wasn't the actual reason, just a coincidence.
I assumed that some exchange provides enough volume that without it there would be worries that you aren't getting true price discovery. Isn't that a concern with low trading volume? Not that that would necessarily be true, but there would be enough concern to cause some people not to trade. And others to want to trade specifically with those kind of nervous people wouldn't because the people they expected to profit by were staying put. And then it would cascade.
