4 ms·
because 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 m
by d--b 9y ago
because 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_...