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Honest question: Is there a way to circumvent these HFT firms and create a direct trading app with retailers interest in mind? If yes I'd love to work with som
by meteor333 6y ago
Honest question: Is there a way to circumvent these HFT firms and create a direct trading app with retailers interest in mind?
If yes I'd love to work with someone to make this happen (technical person here).
- formercoder 6y agoSure, if people wanted to pay to trade.
- mtoner23 6y agoIf you want commission free trading then you need the HFT firms and payment for order flow. These firms hurt institutional investors much more than retail.
- HenryKissinger 6y agoIn order to process actual securities orders to actual exchanges, you'll need to file a metric ton of paperwork with your state government and the federal government, and comply with a lot of regulations.
- ackbar03 6y agoAnd the infrastructure, market access, lisences
- Denvercoder9 6y agoYou can directly route all your orders to an exchange, but HFT firms are active there as well, and they might even get paid for it by the exchange (which you have to pay much higher commissions than what retail traders are paying right now). All alternatives eventually end up reinventing what the HFT firms do.
- ta1234567890 6y agoOr creating an alternative exchange in which HFT is not allowed.
- meteor333 6y agoBut it must be possible to build an app which serves retailers as the customers vs these HFTs? For example, charging monthly subscription or paying micro fees per trade. What are the costs involved for trading directly in exchanges?
- dahfizz 6y agoI am not familiar with the legal aspect, but technically this is definitely possible. You basically just need to rent a server in an exchange colo center, and buy software certified to submit trades / consume market data on that exchange. Then build your brokerage app on top of that "direct market access" software.
- tornato7 6y agoI'd love to see something like Uniswap for stocks. Essentially replacing the orderbook with an equation taking HFTs out of the equation and allowing regular users to make money providing liquidity.
- dahfizz 6y agoRegulations make that more or less illegal. Executions must happen at the NBBO (national best bid / offer). You can't arbitrarily choose which orders to match.
- gen3 6y agoIEX is an exchange with the goal of executing its trades without HFT firms in the middle. https://iextrading.com/ https://iextrading.com/ The harder part for the average person is ensuring their brokerage routes their order flow through IEX. I am not sure how the average person would do that.