What the author is describing is similar to what was going on with the Mt Gox exchange a few years ago. You have a product that should be fungible trading at t

What the author is describing is similar to what was going on with the Mt Gox exchange a few years ago. You have a product that should be fungible trading at two exchanges. In one exchange you have a free market and what should be very close to the true price of the product. In our example this would be most of the bitcoin markets and the Hong Kong stock exchange. In another market for some reason the price has become dislodged from its true price, this is usually due to liquidity issues. In our example this is the Mt Gox exchange and the Shenzhen stock exchange. Now there is what appears to be an obvious arbitrage opportunity but if you look closer, and you really don't need to do any real in-depth analysis to figure this out, you'll see that the market is acting rationally by pricing in the liquidity issues to the shares on one exchange. I mean, if the shares don't trade and you aren't sure when the regulators will let them trade you essentially have an illiquid asset that you can only really trade by brokering a trade yourself with a counter party outside of the stock exchange. And if you ever wondered what liquidity was worth, well you're going to find out that liquidity can be very expensive. It will be interesting to see just how far the Chinese regulators will push this as it could have spill over effects onto the American and European stock markets. So if you've ever thought about what you actually own if you buy a share of a Chinese company on a US stock market, say Alibaba( BABA US Equity), you aren't actually getting a share in Alibaba in the same way you can buy a share in Microsoft. You are actually getting something called an ADR. see: http://www.investopedia.com/university/adr/ http://www.investopedia.com/university/adr/ It's somewhat similar to the brief case full of IOU's that Jim Carey hands over in the movie Dumb and Dumber. Given that you don't own actual shares in the Chinese company but a proxy for them, the Chinese regulators can have a very chilling effect on these shares by shutting down trading of the actual shares in their market as described in the article. If regulators were to say suspend trading for Alibaba shares in China, its not entirely clear how to go about pricing their respective ADR shares that trade in the US, well at least it isn't to me. Fundamental valuations would still be useful but what discount would you give them, given that the underlying shares are no longer trading on their home exchange, and what exactly would you own in this case? TL/DR Or put another way liquidity has value, maybe the HFT value proposition was right after all? :)