4 ms·
The root premise of your argument is faulty: because humans can't trade as fast as computers then humans must be getting stiffed on price. Why would that be? F
by anonu 6y ago
The root premise of your argument is faulty: because humans can't trade as fast as computers then humans must be getting stiffed on price. Why would that be?
First off when you enter an order it's probably being routed by an algorithm trying to get you the best price.
Second, if you do slow things down the way you propose, I don't see how it still won't be a speed arms race to be the first to get involved in the trade.
Speed is good. If you want to disincentive anything it should probably be excessive quoting.
- pbhjpbhj 6y agoSpeed is good for what? Characteristics of a company being a sound investment change in the order of days, not sub-second.
- growse 6y ago> Speed is good for what? Getting an up to date price? When I go to market to trade, I want the best price available right now. Not one from 5 minutes ago.
- ric2b 6y agoBut we're not discussing on the scale of minutes, we're discussing sub-second intervals that aren't even perceptible to humans.
- growse 6y agoThis whole argument seems to boil down to "I don't understand why anyone would want to trade more often than X, therefore nobody should". What's the difference between 5 minutes and any other arbitrary time period, other than hand-wavey notions about "perception"? I'm still not sure what problem removing my ability to cross the spread whenever I like is meant to be solving.
- pbhjpbhj 6y agoFlip it around, what economic problem does enabling you to trade more often than once per day (say) solve?
- aeternum 6y agoTrading more frequently reduces uncertainty (it's harder to predict 24 hours out vs. 1 minute out)and uncertainty equates to risk which means trading only once per day could increase the cost of capital.
- growse 6y agoYou're basically asking "What economic benefit does a free market bring?" at this point.
- ric2b 6y agoIt's easy to list the benefits of free markets, I don't think it's easy to do the same for sub-second regulated markets vs 1 second regulated markets.
- ric2b 6y ago> I'm still not sure what problem removing my ability to cross the spread whenever I like is meant to be solving. What problem does it solve? Why should we have so many expert programmers and mathematicians spending their time competing in a 0-sum game that could simply run a bit slower and produce the same societal value?