4 ms·
> 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 no
by 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 agoCare 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?
- dahfizz 3y agoThat's not how it works. They can't "see you reaching for the milk".