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In fairness, stock exchanges care even more about backward compatibility and so it would be at least as much an issue for them. Edit: Sorry, I say it way too m
by SilasX 6y ago
In fairness, stock exchanges care even more about backward compatibility and so it would be at least as much an issue for them.
Edit: Sorry, I say it way too much, but this merits a repeat of the one-liner: "The reason God was able to finish the earth in only six days is that He didn't have to worry about backward compatibility [or legacy system integration, or satisfying an installed userbase]."
- splintercell 6y agoSure, but there's no real reason why ALL companies need to have their stocks compatible with each other on the same exchange.
- the_local_host 6y ago> [T]here's no real reason why ALL companies need to have their stocks compatible I think it would be way harder to trade a basket of stocks (e.g. pairs trading, going long one and short the other) if you had to worry about mismatched settlement dates across the different stocks; it would be like trading spot against a one-day forward.
- Out_of_Characte 6y agoYou've just defined exactly what high frequency traders do to make money. They balance all stock exchanges in order to make tiny profits on the stock differences.
- andylynch 6y agoThey don't, there are hundreds of exchanges and plenty of competitors for listings - CSDs & clearing are a pinch point. But in some ways exchanges also function as a natural monopoly; especially for primary issuance. e.g. look at AMEX's IPO slate compared to the big two, where the market is right now - it's insignificant, and they are the #3 exchange in the US. People want to list to make money, and that means going where the liquidity is until there's a really good reason not to, like with NASDAQ's move to electronic trading in the '70s.