2 ms·
HFT: I've never understood why stock is traded on a continuous time. In NYC there's a famous crossroad where banks have IT offices, because they want to be as c
by tajen 11y ago
HFT: I've never understood why stock is traded on a continuous time. In NYC there's a famous crossroad where banks have IT offices, because they want to be as close as possible to the stock exchange's servers, because 50ms latency difference can make them earn a few millions per year. If stock were traded discretely, like every 3 minutes or so, we would allow bids to pile up, and HFT and closer banks wouldn't have an advantage over more remote clients.
- dllthomas 11y agoIf stock were traded discretely, like every 3 minutes or so, it would probably reduce the effect. But a faster turn around would still be an advantage - right before the trade happens you can make up your mind based on more information than others have. One thought might be to partly counteract that with a transaction cost that rises over the course of the 3 minutes.