Stockmarkets rigged by high-speed traders, claims Moneyball author Michael Lewis http://www.smh.com.au/business/mark...ball-author-michael-lewis-20140331-35twk.html All high frequency trading should be banned
I vaguely remembering somebody pointing out that you don't necessarily need to ban it outright. Just tax them (alot) for each transaction and make it less appealing to do HFT.
Other countries have tried adding a financial transaction tax (FTT) and it didn't t work out so well: A better solution would be to simply increase transaction fees substantially when a trading firm exceeds a certain number of messages per second so it wouldn't be profitable to send huge numbers of HFT orders that quickly get canceled.
Been happening for decades. This is what the financial sector does to the rest of the economy. Now they are doing it to themselves so everyone suddenly has a problem?
Actually just a few rule changes would do it without taxes. Preventing an order from being cancelled for 30 seconds once placed would screw up many of the hft strategies.
Was reading some commentary on the article and apparently the issue is spacial arbitrage brought about by the Americans having something like 50+ exchanges spread all over the place. So the solution the guys in the article came up with is a good one... time the sending of orders so that they arrive at all exchanges simultaneously: Alternatively, just centralise somehow all buy and sell orders to do away with this problem altogether.