3 ms·
i'm a little confused about how this trade stuff works. How are high speed trading systems not manipulating the market by making faster than human trades/micro
by ramy_d 16y ago
i'm a little confused about how this trade stuff works.
How are high speed trading systems not manipulating the market by making faster than human trades/micro-transactions?
how is it market manipulation if someone automates a patterned behaviour of trading and someone else exploits that behaviour to their advantage at the expense of 1 and only 1 party, the one overseeing the automated transactions.
if only the one HFT machine is affected, or exploited, how is it that exploiting a patterned behaviour isn't considered to be a mistake, or a bad decision, on the part of the HFT algorithm but instead considered a manipulation of stock?
if the exploit was subtle enough that no human trader could distinguish it happening, or if a human trader would never fall for the exploit (as a matter of common sense)then could the exploit be attributed to a bad algorithm and by extension a mistake by the trader who owns the HFT machine?