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Can you explain to me very carefully why the orders of seller A and buyer B weren't able to match before Mr. Evil HFT came along? Moreover, given that buyer an
by cltby 6y ago
Can you explain to me very carefully why the orders of seller A and buyer B weren't able to match before Mr. Evil HFT came along?
Moreover, given that buyer and seller weren't able to match without Mr. E. HFT's help, hasn't he in fact rendered a valuable service (for which he should, of course, be paid)?
- nickbauman 6y agoSo that's the missing part you say? The Internet has been the biggest catalyst of disintermediation in history. But this is not disintermediatable without HFT?
- cltby 6y agoMy question is pure nuts and bolts. A and B wake up one morning and want to trade MSFT. Both submit orders to "the market." You claim HFT somehow inserted itself into the middle of the transaction. I'm asking if you can fill in the blanks on how this is possible.
- nickbauman 6y agoI thought that was clear: prior to HFT, the seller would have made the deal with the buyer without the intermediary HFT because if the latency. HFT exists because of speed. Very hard to say "High Frequency Trading" without saying "High Frequency".
- deleted 6y ago[deleted]
- erik_seaberg 6y agoThe HFT needs latency low enough to win a race against B.
- nickbauman 6y agoThanks, that's what I thought.
- cltby 6y agoIf HFT and B are racing for the same order, they evidently have a very similar trading objective. In which case it's bizarre to ascribe some uniquely negative social value to HFT winning that race.
- erik_seaberg 6y agoThe HFT doesn’t want a position, it’s only trading because it anticipates what B is doing right now and adding cost to the process without improving the result.