6 ms·
Why stop there and not disallow sub-minute trades?
by ben0x539 9y ago
Why stop there and not disallow sub-minute trades?
- d--b 9y agobecause the price needs to move faster than that. If your exchange provides price updates every minute, all your traders are going to flee your exchange for a market place that's more liquid.
- kgwgk 9y agomore liquidity comes from more volume, not from higher frequency
- d--b 9y agoLiquidity describes the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price. (from investopedia)
- deleted 9y ago[deleted]
- dsacco 9y agoThis implicitly describes the value HFT contributes to the market, vis a vis liquidity enhancement.
- d--b 9y agoWhy would markets need sub-millisecond liquidity?
- poikniok 9y agoWhy do you need more than 640K of ram?
- vostok 9y agoSuppose I am making markets in SPY. I need to know where everything else is trading so that I can price it. If my prices are stale by a millisecond then I get filled on my SPY market making orders, but can't get my hedge in the other products because the market has moved against me.
- kgwgk 9y agoExcept that the liquidity dries up when needed.
- dsacco 9y agoHow so?
- kgwgk 9y agohttps://www.bloomberg.com/news/articles/2016-10-24/bundesbank-says-high-frequency-trading-can-enhance-volatility https://www.bloomberg.com/news/articles/2016-10-24/bundesban... http://www.cftc.gov/idc/groups/public/@economicanalysis/documents/file/oce_flashcrash0314.pdf http://www.cftc.gov/idc/groups/public/@economicanalysis/docu... http://www.economist.com/blogs/newsbook/2010/10/what_caused_flash_crash http://www.economist.com/blogs/newsbook/2010/10/what_caused_...
- John23832 9y agoBecause highspeed trading exists solely to extract value from the market communication inefficiencies. That value is sucked up by whales and park in places that do little to serve the market, like empty real estate.