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We should put breaks on it because it's not creating wealth. If it's not creating wealth but people are becoming wealthy it's because money is being extracted v
by branchless 11y ago
We should put breaks on it because it's not creating wealth. If it's not creating wealth but people are becoming wealthy it's because money is being extracted via economic rent (due to monopoly).
When firms make lots of money from trading platforms and then pay staff who go and consume real resources that is ultimately coming by transferring from wealth producers.
- tptacek 11y agoEconomic rent? Monopoly? That was far more true of the firms HFT preys on, and not true of HFT firms at all.
- branchless 11y agoThe big exchanges are showing a little leg to the HFT players in exchange for kick-backs via fees. EDIT: cannot reply due to HN rulz, hence inline... The exchanges compete. The more asymmetric you make the platform for HFT vs the rest the more business you get. Where would you trade? Somewhere you can win or not? Do I want a piece of that? I might let you know the incantations required if you pay me for the "service". In theory other liquidity might move away but many ECNs have a very dominant position. For example NYSE.
- tptacek 11y agoWhat does this have to do with my comment, or your comment that preceded it? You understand that exchanges compete with each other, right? The markets are now decentralized; there are like 15 different lit exchanges on which you can trade stocks.