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Bare in mind that the system used to be centralized and, as mentioned in the article, was much costlier [0]. The fragmentation has downsides and no one likes re
by bko 11y ago
Bare in mind that the system used to be centralized and, as mentioned in the article, was much costlier [0]. The fragmentation has downsides and no one likes redundancies, but it is a direct response to the older, less competitive system. The fact that a decentralized system is better is exhibited in the lower price and the participation in the smaller exchanges.
[0] http://www.bloombergview.com/articles/2014-03-31/michael-lewis-doesn-t-like-high-frequency-traders http://www.bloombergview.com/articles/2014-03-31/michael-lew...
- elecengin 11y agoCompletely agree - in the single exchange markets you see a lot of monopolistic behavior with the operators. In this current, though, we have three major operators with 2-3 exchanges each - many with single digit percentages of market share. I suspect that the savings in execution cost due to competition are vastly overwhelmed by the increased cost of infrastructure for most market participants (excluding the largest firms).