High Frequency Trading

JulieW

JulieW

Well-Known Member
Silver Stacker
John Maudlin - Out of the Box
http://www.mauldineconomics.com/outsidethebox
Ben Hunt's latest Epsilon Theory post, which he calls "Hollow Men, Hollow Markets, Hollow World." As he points out, an increasingly smaller portion of trading in the markets is between individuals looking to actually own a fractional portion of a public company for the long term. Instead, trading is gravitating to machines competing with each other in milliseconds and for a profit of milli-cents.

I get the rationale behind the supposed benefits of high-speed trading; but I have to confess, I just don't buy it. If it was just another way to truly profit from normal commercial activity, I would pretty much have a hands-off attitude. But from everything I can see, high-speed trading is sucking billions of dollars out of the market that would otherwise go to individuals and institutions who are actually there to serve what was once the purpose of Wall Street: to provide new companies with capital and individuals with the chance to participate in the growth of the country. High-frequency trading is a zero-sum game. It takes money from "us" and gives it to funds with instant access to the exchanges.

The fact that high-frequency trading does not work half a mile across the Hudson River because even that short distance slows down the transactions too much, is testimony to the fact that something is truly out of whack. When the speed of light is a barrier to entry, you know we have entered a new era. I am not one to stand in front of the accelerating wave of technology and cry "Stop!" I am rather simpleminded, and it seems to me that if you simply instituted a rule that all buy and sell offers have to at least exist for an outrageous amount of time like one half second, that it would at least begin to level the playing field.
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On the other hand, it is merely an evolutionary step and like all of evolution, it either keeps up with it or fades into the past. No judgement, merely observation.
 
It's like a tiny fee, levied on human traders. It adds up, dramatically hitting the human sharetrader.
 
JulieW said:
John Maudlin - Out of the Box
The fact that high-frequency trading does not work half a mile across the Hudson River because even that short distance slows down the transactions too much,
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Wow, That's odd :/
 
great idea regarding the time period of any orders

How would just charging a small unavoidable "fee" for each trade order , whether filled or not
that alone should add some balance between HFT and human participants
 
dollars said:
great idea regarding the time period of any orders

How would just charging a small unavoidable "fee" for each trade order , whether filled or not
that alone should add some balance between HFT and human participants
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That small fee for each message, filled or not, was added last year in Australia. It's the ASIC market supervision and cost recovery levy on transactions. The money goes towards technology for supervision, analysis and policing of firms' trading activities.
 
High frequency trading is scummy rent seeking behavior enough without the fact that the traders get huge or compete discounts on their fuckery
 
[h]Schwab: HFT a cancer that needs to be stopped[/h]
http://www.cnbc.com/id/101552392

Charles Schwab Corp. Chairman Charles Schwab and CEO Walt Bettinger spoke out against high-frequency trading on Thursday, calling it "a growing cancer that needs to be addressed."

"High-frequency traders are gaming the system, reaping billions in the process and undermining investor confidence in the fairness of the markets," Bettinger and Schwab said in a statement. "If confidence erodes further, the fuel of our free-enterprise system, capital formation, is at risk."
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Lol the FBI should better examine the Fed Mega Frontrunner with its new dollars that are spent first, including the FBI wages. Top down examination. :D
 
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