3 ms·
> Something like a minimum holding time is a more reasonable approach. However, there's not a clear cut answer in any case. Why do you want to reduce high freq
by dsacco 9y ago
> Something like a minimum holding time is a more reasonable approach. However, there's not a clear cut answer in any case.
Why do you want to reduce high frequency trading?
- ghostbrainalpha 9y agohttp://www.investopedia.com/articles/markets/012716/four-big-risks-algorithmic-highfrequency-trading.asp http://www.investopedia.com/articles/markets/012716/four-big... This article has a lot of the reasons. I think loss of confidence in Market Integrity is the most important one.
- dsacco 9y agoThat article has two reasons, though it spreads "amplification" out among several factors. In fairness, I do agree with the problem of flash crashes, whether they are caused by algorithms moving too quickly or too similarly. I'll contest the "confidence in the market" hypothesis, however. As more investors move to index funds, I don't believe "confidence" as defined would have any significant impact by increasing or decreasing, because fewer participants overall will be actively engaged.
- ghostbrainalpha 9y agoThat's a good point about index funding. I do think if confidence in the market gets low enough it is possible that people will stop investing all together or invest less than they would have. But that is me sidestepping the issue a bit.
- kesselvon 9y agoflash market crashes.
- dsacco 9y agoOkay, fair enough. But do you believe these happen often enough, or will increase in the future, to outweigh the improvements to liquidity provided by HFT?