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> For large stocks in particular, algorithmic trading narrows spreads lower spreads means you pay less when you trade, simple.
by andylei 15y ago
> For large stocks in particular, algorithmic trading narrows spreads
lower spreads means you pay less when you trade, simple.
- wisty 15y agoBasically, algorithmic traders are disrupting what traditional traders used to do. In the future, Wall Street will be replaced with a couple of big server farms, and a Demand-Media style bidding system for commoditized stock analysts. Imagine it - "Earn cash in your spare time - estimate the future profits of Fortune 500 companies, and plug them into a structured database! Senior members represent us on boards of directors, telling CEOs what the computer thinks they are really worth! (payments contingent on the long-term value of your work)."
- hackinthebochs 15y agoForgive my ignorance, but how so? How does the wealth extracted from the transaction play into this (arbitrage extracts value from a transaction, ideally it's made up for through liquidity).