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I don't get it. If the flash crash brought down the market drastically for 20 minutes, only to pull it back up, this only points to an opportunity for a more in
by baltcode 16y ago
I don't get it. If the flash crash brought down the market drastically for 20 minutes, only to pull it back up, this only points to an opportunity for a more intelligent algorithm to be allowed to correct that and make money in the process. I can understand this as being an example of the state of the art being pretty dumb/gullible to multiplying its own noise, but I don't understand why this would be bad. Didn't the algos selling during the low and buying stocks later lose money?
- yummyfajitas 16y agoDidn't the algos selling during the low and buying stocks later lose money? Not necessarily, many trades were broken (mostly trades near the low). If you sold low and bought halfway to the high, you probably made money since your sale was broken (but not the buy).
- baltcode 16y agoSo the problem was that the trades were broken, not HFT per se.