4 ms·
The fact that this is even a thing is the problem. Is this industry creating anything of actual value or is this just a giant MMORPG where the object is to grin
by api 9y ago
The fact that this is even a thing is the problem. Is this industry creating anything of actual value or is this just a giant MMORPG where the object is to grind long enough to get a house in the Hamptons?
- Ntrails 9y agoDefine value. Should capital markets work? Should people be allowed to dynamically allocate capital to the most attractive companies? The argument tends to be that making a decision about buying and selling in microseconds is not providing value, but generally everyone agrees that it should be possible at some level (by minute? by hour? by day?). There are a bunch of arguments here but broadly speaking I don't see how they change the underlying game. Make good decisions on where to allocate capital, make money as the market price caches up with your prediction.
- golergka 9y agoYes. HFT in particular creates liquidity for other trades in the market.
- Applejinx 9y agoI'd accept that answer if you added, "AND is just a giant MMORPG where the object is to grind long enough to get a house in the Hamptons". Both can be true. I think the original poster's criticism is valid. In particular, since one of the objects is to grind long enough that the rules of the game don't apply to you, see 'Goldman Sachs', I think the original poster's criticism is valid. There is no referee. The only goal is to give game winners more money, and if they screw up, give them their money back and then give them more money. It justifies things like investments in index funds (or identifying those who are already competing outside the rules and rewarding them by investing more money in them since they cannot fail), but it's gone well beyond the rational functioning of a system, much less a self-regulating system with useful purposes. It's Calvinball. Go ahead and enjoy it, but it's not right.