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How would it? What positive externality is generated by HFT's winning and losing money from each other? Are you arguing that the market liquidity provided just
by qq66 16y ago
How would it? What positive externality is generated by HFT's winning and losing money from each other?
Are you arguing that the market liquidity provided justifies the amount of effort invested? Obviously it does in some purely capitalistic sense, but what is really created by this activity.
- kiba 16y agoSo you are arguing extremely intense competition is useless. From my point of view, market participants make a living by their ability to execute OODA loops. The bot trading wars is a more extreme version of the competitive process.
- wladimir 16y agoYes, extreme competition is useless. A level of competition is good, because it makes people do their best. But as soon as it becomes too cut-throat, resources are wasted on auxiliary things beyond just being the best and most cost-effective. These electronic trading boats would be an excellent example of "market failure" in this regard. Instead of actual trading boats to trade their food and stuff, we'll now sit in the middle of the ocean to correlate some arbitrary signals... Like excessive speculation in commodities, it doesn't add value. Don't tell me "it adds liquidity" because I already know that. One could argue we have massively enough liquidity already in the things that would actually be arbitraged here. The financial sector overall is much too big: http://www.voxeu.org/index.php?q=node/6328 http://www.voxeu.org/index.php?q=node/6328
- jam 16y ago"These electronic trading boats" Wait... is this a joke?