3 ms·

> ...being a middle-man just skims off the top of things that are already happening. Presumably you buy all your goods directly from growers / manufacturers, r

by growse 3y ago

> ...being a middle-man just skims off the top of things that are already happening. Presumably you buy all your goods directly from growers / manufacturers, rather than using retailers who are simply there to skim off the top? > Also, HFT has contributed to a flash crash before, so it's not free of externalities either. You're confusing the effects of the industry with the effects of incompetent actors within that industry. Besides, the negative externalities are trivial. Institutional holders barely notice or care about flash crashes.

delecti 3y ago
The point of the stock market is to be a market. And when possible I do like to buy from companies that sell their product directly. > You're confusing the effects of the industry with the effects of incompetent actors within that industry Doesn't that same point apply to Cambridge Analytica, the singular example of a negative externality from ads in the comment I replied to? Whether HFTs and/or the broader concept of middle-men are better or worse than ads, they're at least still in the same ballpark. I definitely agree with the GP comment's sentiment: > It fits in the "our smartest people are making people click ads" category.
- growse 3y ago
  > The point of the stock market is to be a market. And when possible I do like to buy from companies that sell their product directly. What if you're in the northern hemisphere and want to buy strawberries in December? Or you want a pint of milk, but your local dairy only sells it by the tanker? The point is effective middlemen help markets function even better than if it were just people with things to sell and people who wanted to buy them. They provide a valuable service, which the market also coenienhly ascribes a value to. > > You're confusing the effects of the industry with the effects of incompetent actors within that industry > Doesn't that same point apply to Cambridge Analytica, the singular example of a negative externality from ads in the comment I replied to? I think there's a difference between incompetence and malice. But broadly, yes. I don't think you can write off the ad / data broker industry because of a few bad actors. > Whether HFTs and/or the broader concept of middle-men are better or worse than ads, they're at least still in the same ballpark. I definitely agree with the GP comment's sentiment: > > It fits in the "our smartest people are making people click ads" category. The difference I see is that it's possible to externally measure and quantify the benefits / externalities of HFTs to the market participants. It's much less clear cut in ads, which is why some people feel ickier about that particular industry. But I don't buy the whole "smartest people doing useless things" argument. You can't make people work on "useful" things, and you can't discount everything that a smart person does in the ad industry as useless to humanity. It's much more complicated than that.
  - polygamous_bat 3y ago
    > What if you're in the northern hemisphere and want to buy strawberries in December? Or you want a pint of milk, but your local dairy only sells it by the tanker? You do understand how that's different from HFT, right? That's more of a market making job. HFT is like hiring The Flash to be your grocery store clerk, who notices you reaching for the milk, and runs in to empty out the shelf and raise the price by 0.003 cents by the time your hand gets there.
    - growse 3y ago
      > You do understand how that's different from HFT, right? HFTs provide liquidity, which by definition is providing what people want to buy/sell, when they want to trade it and it the desired quantity. > HFT is like hiring The Flash to be your grocery store clerk, who notices you reaching for the milk, and runs in to empty out the shelf and raise the price by 0.003 cents by the time your hand gets there. This is not what HFTs do. They can't see your "hand reaching", they see your quote hit the book at the same time as everyone else. It's not magic. They're literally the market makers. Your complaint appears to be that they're good at reacting to new information, i.e. being good market makers.
      - HDThoreaun 3y ago
        > they see your quote hit the book at the same time as everyone else. It's not magic. Every exchange gives "good standing market participants" aka HFT market makers first dibs on orders. If a gallon of milk goes on sale and I'm waiting in line with a market maker I will never make the sale, it'll go the the HFT firm every time.
        growse 3y ago
        Care to link to a major equity exchange's product page and/or sec declaration that details exactly how this works (ie, criteria for getting "first dibs", what that actually means etc)? Or are you talking about exchange hosting, where you get lower latency if you pay more to colocate?
knodi123 3y ago
> Presumably you buy all your goods directly from growers / manufacturers, rather than using retailers who are simply there to skim off the top? Grocery stores to the things that are difficult for me to do, like sourcing and sorting a wide variety of produce and products. Also, they use economies of scale to make it cheaper than if I were to do the same thing myself without an intermediary. HFT firms neither enable customers to do things they can't accomplish on their own, nor do they save customers money by exploiting economies of scale.
- growse 3y ago
  > HFT firms neither enable customers to do things they can't accomplish on their own, nor do they save customers money by exploiting economies of scale. Study after study has shown this empirically the be false. It's uncontroversial and established that spreads have significantly tightened (that means it's cheaper for market participants to trade) because of the rise of HFT market makers.
  - andrepd 3y ago
    > It's uncontroversial and established that spreads have significantly tightened (that means it's cheaper for market participants to trade) because of the rise of HFT market makers. In more concrete terms, what does it achieve? Genuinely curious. It seems to me that "enabling capital to get better returns" is not a noble goal in itself (especially considering the gilded age levels of inequality we experience in the developed world today).
    - dahfizz 3y ago
      Have you noticed that anyone can get an online brokerage account and have direct market access for zero fees? The liquidity from market makers and HFT firms have ushered in this age of free trading for the lay man. This was not possible even 10 years ago. > It seems to me that "enabling capital to get better returns" is not a noble goal in itself The majority of Americans own stock. Sabotaging the middle class's retirement to give a middle finger to some billionaires does not seem noble to me.

by growse 3y ago

delecti 3y ago

The point of the stock market is to be a market. And when possible I do like to buy from companies that sell their product directly. > You're confusing the effects of the industry with the effects of incompetent actors within that industry Doesn't that same point apply to Cambridge Analytica, the singular example of a negative externality from ads in the comment I replied to? Whether HFTs and/or the broader concept of middle-men are better or worse than ads, they're at least still in the same ballpark. I definitely agree with the GP comment's sentiment: > It fits in the "our smartest people are making people click ads" category.

growse 3y ago
> The point of the stock market is to be a market. And when possible I do like to buy from companies that sell their product directly. What if you're in the northern hemisphere and want to buy strawberries in December? Or you want a pint of milk, but your local dairy only sells it by the tanker? The point is effective middlemen help markets function even better than if it were just people with things to sell and people who wanted to buy them. They provide a valuable service, which the market also coenienhly ascribes a value to. > > You're confusing the effects of the industry with the effects of incompetent actors within that industry > Doesn't that same point apply to Cambridge Analytica, the singular example of a negative externality from ads in the comment I replied to? I think there's a difference between incompetence and malice. But broadly, yes. I don't think you can write off the ad / data broker industry because of a few bad actors. > Whether HFTs and/or the broader concept of middle-men are better or worse than ads, they're at least still in the same ballpark. I definitely agree with the GP comment's sentiment: > > It fits in the "our smartest people are making people click ads" category. The difference I see is that it's possible to externally measure and quantify the benefits / externalities of HFTs to the market participants. It's much less clear cut in ads, which is why some people feel ickier about that particular industry. But I don't buy the whole "smartest people doing useless things" argument. You can't make people work on "useful" things, and you can't discount everything that a smart person does in the ad industry as useless to humanity. It's much more complicated than that.
- polygamous_bat 3y ago
  > What if you're in the northern hemisphere and want to buy strawberries in December? Or you want a pint of milk, but your local dairy only sells it by the tanker? You do understand how that's different from HFT, right? That's more of a market making job. HFT is like hiring The Flash to be your grocery store clerk, who notices you reaching for the milk, and runs in to empty out the shelf and raise the price by 0.003 cents by the time your hand gets there.
  - growse 3y ago
    > You do understand how that's different from HFT, right? HFTs provide liquidity, which by definition is providing what people want to buy/sell, when they want to trade it and it the desired quantity. > HFT is like hiring The Flash to be your grocery store clerk, who notices you reaching for the milk, and runs in to empty out the shelf and raise the price by 0.003 cents by the time your hand gets there. This is not what HFTs do. They can't see your "hand reaching", they see your quote hit the book at the same time as everyone else. It's not magic. They're literally the market makers. Your complaint appears to be that they're good at reacting to new information, i.e. being good market makers.
    - HDThoreaun 3y ago
      > they see your quote hit the book at the same time as everyone else. It's not magic. Every exchange gives "good standing market participants" aka HFT market makers first dibs on orders. If a gallon of milk goes on sale and I'm waiting in line with a market maker I will never make the sale, it'll go the the HFT firm every time.
      - growse 3y ago
        Care to link to a major equity exchange's product page and/or sec declaration that details exactly how this works (ie, criteria for getting "first dibs", what that actually means etc)? Or are you talking about exchange hosting, where you get lower latency if you pay more to colocate?

knodi123 3y ago

> Presumably you buy all your goods directly from growers / manufacturers, rather than using retailers who are simply there to skim off the top? Grocery stores to the things that are difficult for me to do, like sourcing and sorting a wide variety of produce and products. Also, they use economies of scale to make it cheaper than if I were to do the same thing myself without an intermediary. HFT firms neither enable customers to do things they can't accomplish on their own, nor do they save customers money by exploiting economies of scale.

growse 3y ago
> HFT firms neither enable customers to do things they can't accomplish on their own, nor do they save customers money by exploiting economies of scale. Study after study has shown this empirically the be false. It's uncontroversial and established that spreads have significantly tightened (that means it's cheaper for market participants to trade) because of the rise of HFT market makers.
- andrepd 3y ago
  > It's uncontroversial and established that spreads have significantly tightened (that means it's cheaper for market participants to trade) because of the rise of HFT market makers. In more concrete terms, what does it achieve? Genuinely curious. It seems to me that "enabling capital to get better returns" is not a noble goal in itself (especially considering the gilded age levels of inequality we experience in the developed world today).
  - dahfizz 3y ago
    Have you noticed that anyone can get an online brokerage account and have direct market access for zero fees? The liquidity from market makers and HFT firms have ushered in this age of free trading for the lay man. This was not possible even 10 years ago. > It seems to me that "enabling capital to get better returns" is not a noble goal in itself The majority of Americans own stock. Sabotaging the middle class's retirement to give a middle finger to some billionaires does not seem noble to me.