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The case we are talking about however, I believe, is where NYSE operates an apparently public market with delayed quotes for some players. Tptacek claims that m
by jsprogrammer 11y ago
The case we are talking about however, I believe, is where NYSE operates an apparently public market with delayed quotes for some players. Tptacek claims that my orders cannot even make it into the supposedly public market because someone will scoop up my order on the way, before it even reaches the delayed quote market and therefore, the market is not special because I cannot access it (which is disputable).
- tptacek 11y agoYes: if you, as an individual, place an order at an online brokerage, your order is most probably not going to make it to an exchange. It would be stupid to send it there, because wholesalers will give you better prices. This is the case for retail orders, but not for trading firms. Prop trading firms don't tend to route their orders through wholesalers; they have deals with execution platforms (or implement their own) and route their orders to exchanges. But there's a whole 'nother set of reasons why we're not especially concerned about competitions between prop trading firms on speed/latency/whatever: if they're impacted by HFT at all, they're competing in a zero-sum game to arb prices, and there's no moral reason why a slower trading firm is entitled to some equitable share of all the available profit from some arbitrage strategy.
- zekevermillion 11y agoTptacek seems quite convinced that the "tiny spread" pocketed by HFT arbitrageurs comes entirely out of the pocket of competing HFT shops and has no impact on the prices paid by other participants.