3 ms·

Lots of things dont create economic value but that doesnt make them bad. Why so you find it interesting?

Firmwarrior 3y ago
HFT is frustrating since it creates dubious value and eats up a lot of technical talent in the process I don't think there's a reasonable way to stamp it out, though.. I guess if IEX's anti-HFT strategies were more ubiquitous it'd transform the HFT industry and maybe calm it down a little?
- kasey_junk 3y ago
  IEX’s biggest participants are HFT market makers.
spicebox 3y ago
Usually things that don’t create economic value at least create some other kind of social value, which HFT doesn’t really seem to do
barnabee 3y ago
HFT at the extremes doesn't just create no economic value, it actually extracts value from all other participants. Frequent batch auctions are one possible solution to this problem[0] that I see as quite promising. The problem of couse is that exchanges profit from the HFT extraction via fees and the prestige generated by reporting higher trading volume. Any real solution needs to solve both the micro-structure and the macro-structure of markets and make exchanges a publicly or collectively owned (or at least incentivised) utility. [0] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2388265 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2388265
- tptacek 3y ago
  It does the literal opposite thing: it provides value to every market participant (except the inefficient human market makers and commercial brokers it replaced).
nocoiner 3y ago
LOL, an economic transaction that doesn’t create economic value is … not a good economic transaction. But obviously good for some people.
geysersam 3y ago
What kind of things are you referring to? People writing poetry? Or someone helping their elderly neighbor shopping? Or misleading advertising? Some things that don't create economic value are extremely good and valuable. Bit it's obvious that spending resources to do nothing useful is objectively bad, even if it happens to redistribute wealth to you.

HFT is frustrating since it creates dubious value and eats up a lot of technical talent in the process I don't think there's a reasonable way to stamp it out, though.. I guess if IEX's anti-HFT strategies were more ubiquitous it'd transform the HFT industry and maybe calm it down a little?

kasey_junk 3y ago
IEX’s biggest participants are HFT market makers.

spicebox 3y ago

Usually things that don’t create economic value at least create some other kind of social value, which HFT doesn’t really seem to do

barnabee 3y ago

HFT at the extremes doesn't just create no economic value, it actually extracts value from all other participants. Frequent batch auctions are one possible solution to this problem[0] that I see as quite promising. The problem of couse is that exchanges profit from the HFT extraction via fees and the prestige generated by reporting higher trading volume. Any real solution needs to solve both the micro-structure and the macro-structure of markets and make exchanges a publicly or collectively owned (or at least incentivised) utility. [0] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2388265 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2388265

tptacek 3y ago
It does the literal opposite thing: it provides value to every market participant (except the inefficient human market makers and commercial brokers it replaced).

nocoiner 3y ago

LOL, an economic transaction that doesn’t create economic value is … not a good economic transaction. But obviously good for some people.

geysersam 3y ago

What kind of things are you referring to? People writing poetry? Or someone helping their elderly neighbor shopping? Or misleading advertising? Some things that don't create economic value are extremely good and valuable. Bit it's obvious that spending resources to do nothing useful is objectively bad, even if it happens to redistribute wealth to you.