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It's worth nothing that eating into Renaissance's profits in this way is good for everyone else because it means that accurate prices are reaching the market fa

by harryh 10y ago

It's worth nothing that eating into Renaissance's profits in this way is good for everyone else because it means that accurate prices are reaching the market faster.

deleted 10y ago
[deleted]
Dylan16807 10y ago
I don't understand your argument. If a firm is able to consistently get to all the other exchanges first, they can shave pennies off of a large percent of orders. That's a pretty big downside for everyone that trades. They get accurate prices to the market faster, but only by a millisecond or so. That's a miniscule upside. How is the bad not a thousand times the good?
- gpderetta 10y ago
  If market makers (i.e. most HTF firms) weren't able react to large market moving trades very quickly, they would have to keep spreads wider to manage the risk of adverse selection. This increases the cost for everybody for the benefit of a few large investors.
Rainymood 10y ago
>good for everyone else Except for those who have their pensions stored in Renaissance's own pension fund, hah!
darawk 10y ago
You could say the same thing about insider trading. So, the argument that accurate prices reach the market faster is not, in and of itself, an argument that something is good.
- deleted 10y ago
  [deleted]
- eru 10y ago
  Why? He can argue that insider trading is good. Which is actually a pretty easy argument to make. (And places like Germany only recently tightened laws against it.)
  - darawk 10y ago
    What is your argument that insider trading is good?
    - kasey_junk 10y ago
      I don't know how I feel about it, but several relatively common arguments in favor of it are: 1) speeds up price discovery 2) makes complying with regulation cheaper 3) it is nearly impossible to enforce currently Some op-ed pieces arguing for it. http://www.marketwatch.com/story/why-insider-trading-should-be-legal-2011-05-17 http://www.marketwatch.com/story/why-insider-trading-should-... http://www.forbes.com/sites/jeffreydorfman/2015/03/22/a-modern-insider-trading-law-would-recognize-the-victims-of-current-law/#6ab092376d0c http://www.forbes.com/sites/jeffreydorfman/2015/03/22/a-mode... https://www.washingtonpost.com/news/wonk/wp/2013/07/26/insider-trading-makes-us-richer-better-informed-and-could-prevent-corporate-scandals-legalize-it/ https://www.washingtonpost.com/news/wonk/wp/2013/07/26/insid...
      - eru 10y ago
        Yes, that's along the lines I would be arguing. I am on the fence myself, not having thought about the matter too much. Instinctively, I'd say insider trading should be handled as a breach of contract (ie if I trade on something that I signed an NDA for), not as a criminal matter.

by harryh 10y ago

It's worth nothing that eating into Renaissance's profits in this way is good for everyone else because it means that accurate prices are reaching the market faster.

deleted 10y ago

[deleted]

Dylan16807 10y ago

I don't understand your argument. If a firm is able to consistently get to all the other exchanges first, they can shave pennies off of a large percent of orders. That's a pretty big downside for everyone that trades. They get accurate prices to the market faster, but only by a millisecond or so. That's a miniscule upside. How is the bad not a thousand times the good?

gpderetta 10y ago
If market makers (i.e. most HTF firms) weren't able react to large market moving trades very quickly, they would have to keep spreads wider to manage the risk of adverse selection. This increases the cost for everybody for the benefit of a few large investors.

Rainymood 10y ago

>good for everyone else Except for those who have their pensions stored in Renaissance's own pension fund, hah!

darawk 10y ago

You could say the same thing about insider trading. So, the argument that accurate prices reach the market faster is not, in and of itself, an argument that something is good.

deleted 10y ago
[deleted]
eru 10y ago
Why? He can argue that insider trading is good. Which is actually a pretty easy argument to make. (And places like Germany only recently tightened laws against it.)
- darawk 10y ago
  What is your argument that insider trading is good?
  - kasey_junk 10y ago
    I don't know how I feel about it, but several relatively common arguments in favor of it are: 1) speeds up price discovery 2) makes complying with regulation cheaper 3) it is nearly impossible to enforce currently Some op-ed pieces arguing for it. http://www.marketwatch.com/story/why-insider-trading-should-be-legal-2011-05-17 http://www.marketwatch.com/story/why-insider-trading-should-... http://www.forbes.com/sites/jeffreydorfman/2015/03/22/a-modern-insider-trading-law-would-recognize-the-victims-of-current-law/#6ab092376d0c http://www.forbes.com/sites/jeffreydorfman/2015/03/22/a-mode... https://www.washingtonpost.com/news/wonk/wp/2013/07/26/insider-trading-makes-us-richer-better-informed-and-could-prevent-corporate-scandals-legalize-it/ https://www.washingtonpost.com/news/wonk/wp/2013/07/26/insid...
    - eru 10y ago
      Yes, that's along the lines I would be arguing. I am on the fence myself, not having thought about the matter too much. Instinctively, I'd say insider trading should be handled as a breach of contract (ie if I trade on something that I signed an NDA for), not as a criminal matter.