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> Like many service providers, to a lot of people the service provided is worth more than the cost. Does the average trader whose orders these HFT firms fill a

> Like many service providers, to a lot of people the service provided is worth more than the cost. Does the average trader whose orders these HFT firms fill actually have a choice in the matter? Certainly big institutions do with desk trading, but to my knowledge the vast majority of us do not have any choice in who fills an order or whether to wait a little longer not to participate in market making.

growse 3y ago
Sure, you can trade OTC. Just phone your friends / neighbours and ask if they want to buy your stuff. Maybe put an ad in the local paper.
- civilitty 3y ago
  Then HFT firms aren't service providers that I have the option of associating with, I'm actually forced to use them in order to participate in the public stock exchange. Nice stock you have there, it'd be a shame if ya couldn't sell it...
  - growse 3y ago
    What is "the public stock exchange"? They're all private entities with their own membership rules. You can buy/sell the same instrument at hundreds of different venues, no-one's forcing you to use any specific market. Take your pick. Start your own.
    - Dylan16807 3y ago
      There are massive barriers and costs to selling stocks that way, and you know it. This is like saying you have the free choice not to have a phone number or email address. Yeah, technically you do, but effectively you have to use the system. And for the most part you get that from private entities too.
      - deleted 3y ago
        [deleted]
  - Twisell 3y ago
    You are maybe confused because HFT refer to a very specific trading hack that is not available to general public. What you refer to sound more like brokers that offer online trading services, it's "instantaneous" but not fast enough to enable the latency scam used in HFT.
    - denotational 3y ago
      > HFT refer to a very specific trading hack Maybe 10 years ago, but these days (outside of very specific markets) most of the big “HFT”s are really doing quantitative trades or market making. > that is not available to general public Collocating with a venue is expensive and clearing membership of an exchange has capital requirements, but it’s not some old-boys club; anyone with sufficient funds can take part. It’s not available to the general public to exactly the same extent that exchange membership isn’t available to the general public.
denotational 3y ago
> but to my knowledge the vast majority of us do not have any choice in who fills an order Why on earth do you care who fills your order? If you place a GTC/Day limit order, it will fill at the price you deem fair, or better. If you enter a transaction to deal a quantity of a security at the price you deem fair, what difference does the nature of the counterparty make?
- jdsully 3y ago
  The “or better” is doing a lot of the heavy lifting here. Your choice of counter party has a large impact on the price improvement.
  - denotational 3y ago
    > The “or better” is doing a lot of the heavy lifting here. I disagree, I think I could have skipped the "or better" without making a substantive change to my point. Is your argument that the presence of HFT participants (or really electronic market makers) leads to reduced price improvement for other participants?

growse 3y ago

Sure, you can trade OTC. Just phone your friends / neighbours and ask if they want to buy your stuff. Maybe put an ad in the local paper.

civilitty 3y ago
Then HFT firms aren't service providers that I have the option of associating with, I'm actually forced to use them in order to participate in the public stock exchange. Nice stock you have there, it'd be a shame if ya couldn't sell it...
- growse 3y ago
  What is "the public stock exchange"? They're all private entities with their own membership rules. You can buy/sell the same instrument at hundreds of different venues, no-one's forcing you to use any specific market. Take your pick. Start your own.
  - Dylan16807 3y ago
    There are massive barriers and costs to selling stocks that way, and you know it. This is like saying you have the free choice not to have a phone number or email address. Yeah, technically you do, but effectively you have to use the system. And for the most part you get that from private entities too.
    - deleted 3y ago
      [deleted]
- Twisell 3y ago
  You are maybe confused because HFT refer to a very specific trading hack that is not available to general public. What you refer to sound more like brokers that offer online trading services, it's "instantaneous" but not fast enough to enable the latency scam used in HFT.
  - denotational 3y ago
    > HFT refer to a very specific trading hack Maybe 10 years ago, but these days (outside of very specific markets) most of the big “HFT”s are really doing quantitative trades or market making. > that is not available to general public Collocating with a venue is expensive and clearing membership of an exchange has capital requirements, but it’s not some old-boys club; anyone with sufficient funds can take part. It’s not available to the general public to exactly the same extent that exchange membership isn’t available to the general public.

denotational 3y ago

> but to my knowledge the vast majority of us do not have any choice in who fills an order Why on earth do you care who fills your order? If you place a GTC/Day limit order, it will fill at the price you deem fair, or better. If you enter a transaction to deal a quantity of a security at the price you deem fair, what difference does the nature of the counterparty make?

jdsully 3y ago
The “or better” is doing a lot of the heavy lifting here. Your choice of counter party has a large impact on the price improvement.
- denotational 3y ago
  > The “or better” is doing a lot of the heavy lifting here. I disagree, I think I could have skipped the "or better" without making a substantive change to my point. Is your argument that the presence of HFT participants (or really electronic market makers) leads to reduced price improvement for other participants?