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How do you explain all of the HFT firms that have gone out of business over the years? They're competing with each other, it's a very competitive space that doe
by bidirectional 6y ago
How do you explain all of the HFT firms that have gone out of business over the years? They're competing with each other, it's a very competitive space that doesn't even capture that much value compared to the people they replaced.
- yummypaint 6y agoTo win at HFT you have to have lower latency than your competitors. The NYSE rents server space in their building for this very purpose and makes alot of money doing so. If you don't have hardware there you will go out of business trying to compete with those who do. From a broad perspective it kind of looks like companies being allowed to skim freely from the market so long as the right people get their cut.
- kortilla 6y agoGetting early views of an order book and trades does not allow you to skim. No matter how close you are to the servers, you’re still seeing the data after the order has gone in and has either been matched or entered into the order book. There is no way for them to beat the order.