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Ask HN: Can a bill be introduced to stop HFT?
HFT is not trading. It is gambling. It has killed stock market.
- AnimalMuppet 11y agoYes, such a bill can be introduced. I doubt it could pass, though, unless there's much more documented and publicized evidence of damage caused by HFT.
- mandeepj 11y agoOne of the biggest reasons for market crash is automated selling that gets started by computers.
- minimaxir 11y agoMacroeconomics is a little more complicated than that.
- WorldMaker 11y agoI think the documentation is there, it's just the publication that's not there (whether things are just under-noticed/published or intentionally buried who knows). For what it's worth, I support the idea of a "fractional penny tax" on trades as a marketable solution to let the "free market" fix HFT. I've mostly seen it advocated by David Brin, but Congress could easily levy a tax on trading that would be some fraction of a penny (say a tenth or a hundredth of a penny). For a human scale trader that tax is a rounding error (essentially in our favor) at best and a loose change issue at worst (pull a couple pennies from your couch cushion). For HFT it's a legitimate concern and something that HFT would have to take into account. It probably wouldn't stop HFT (but that becomes a market decision if the extra "friction" from the tax is worth the "benefits" of the HFT in a cost/benefit analysis), but it might slow it down a bit, and the taxes raised by it could hopefully be put into mitigation efforts against the worst effects of HFT.
- mandeepj 11y agoThe other thing that I like to be stopped is giving stock ratings. If a fund manager wants to buy a stock then they would cut down its rating and other way around if they want to sell it.
- 1971genocide 11y agoBernie Sanders has an interesting idea based on some research done by economist. He calls it the "Robin Hood Tax". Essentially you charge a small fee whenever any trade happens in the market. The opponents of this idea state that it will prevent the market from being efficient as trading would slow down - undermining the Efficient Market Hypothesis. However his argument is that a small enough charge will not prevent genuine investor from trading and just discourage the speculative traders.
- mandeepj 11y agoThere is already a trading fee which equates to 'Robin hood tax'. Each platform has their own number for e.g. scottrade charges $7 for each buy and sell. I think HFT traders don't pay that fee for each trade. HFT is just evil. Direction less buy\selling based on the trend that is currently prevalent in the market.