3 ms·

With things like HFT what proportion of stock market transactions have economic value?

• mancerayder 8y ago
  Matt Levine talks about this, and despite its obvious pitfalls (in terms of unfairness amongst players in the market), HFT does provide utility of arbitrage. Also, all that moving around of stocks theoretically provides more liquidity - i.e., it's easier to find a counterparty when you buy and sell; you don't sit there waiting for the trade to execute. I'm no expert, however.
  • physguy1123 8y ago
    There's a distinction to be made between many different players in 'hft'. You have market makers, latency arb, plain old short-term quant trading which all provide different sorts of 'economic value. Most players are running a mix of some to all of these strategies - for example, in options, fast trading on spot moves is really some weird mix of everything from latency arb to market-making to long-term option pricing. One could argue that pure latency arb (what flash boys portray as hft) is fairly useless since it's just trying to catch stale quotes that market makers would move otherwise, but that's a very small portion of the industry.
• vkou 8y ago
  The energy cost of an HFT transaction is much lower then the energy cost of a blockchain transaction. The question is not how wasteful a system is. The question is, what is the value / waste ratio of it.