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(I mean trading in daily/weekly - not intra-day) Concentrating trading in a few hands is the problem we had - too big to fail. HFT will lead to barriers to new

(I mean trading in daily/weekly - not intra-day) Concentrating trading in a few hands is the problem we had - too big to fail. HFT will lead to barriers to new entrants (because of increasing startup costs).

Permit 14y ago
>Concentrating trading in a few hands is the problem we had - too big to fail No. You're confusing things. High frequency trading had nothing to do with financial bailouts. To my knowledge, no high frequency trading shop has ever been bailed out or deemed too big to fail. >HFT will lead to barriers to new entrants (because of increasing startup costs). Please explain this, how does HFT increase startup costs? I'm not sure who you think benefits the most out of high frequency trading, but it's not huge banks like Goldman Sachs. My understanding is that the best high frequency shops are relatively small. They're made up of a mix of programmer and quants, not traditional investment bankers.
- marshallp 14y ago
  I'm not confusing anything. Yes the previous crash wasn't HFT but current trends will lead to the already rich (the banks) being the HFT's because the land surrounding the exchange is limited and costs will increase (HFT is about land and computer resources, and high speed networks - new models don't factor in as much). It won't be programmers calling the shots, they'll be employed by the banks. Already, the average geek is outgunned (overall competitiveness has decreased).
  - iwejfweoifjweif 14y ago
    How do you figure the average geek is outgunned? There are multitudes of small HFT shops staffed mainly by geeks in Manhattan doing pretty well. HFT tends not to be profitable enough for banks to bother with, especially if you have to pay most of your profits to the programmers behind it so they don't leave and do it themselves.
    - marshallp 14y ago
      There's been plenty of discussions on HN about getting into HFT and the advice given is that it's too expensive for the average guy.
yummyfajitas 14y ago
HFT is the result of barriers to entry falling. Any software engineer can save money for a couple of years and start an HFT shop.

Permit 14y ago

>Concentrating trading in a few hands is the problem we had - too big to fail No. You're confusing things. High frequency trading had nothing to do with financial bailouts. To my knowledge, no high frequency trading shop has ever been bailed out or deemed too big to fail. >HFT will lead to barriers to new entrants (because of increasing startup costs). Please explain this, how does HFT increase startup costs? I'm not sure who you think benefits the most out of high frequency trading, but it's not huge banks like Goldman Sachs. My understanding is that the best high frequency shops are relatively small. They're made up of a mix of programmer and quants, not traditional investment bankers.

marshallp 14y ago
I'm not confusing anything. Yes the previous crash wasn't HFT but current trends will lead to the already rich (the banks) being the HFT's because the land surrounding the exchange is limited and costs will increase (HFT is about land and computer resources, and high speed networks - new models don't factor in as much). It won't be programmers calling the shots, they'll be employed by the banks. Already, the average geek is outgunned (overall competitiveness has decreased).
- iwejfweoifjweif 14y ago
  How do you figure the average geek is outgunned? There are multitudes of small HFT shops staffed mainly by geeks in Manhattan doing pretty well. HFT tends not to be profitable enough for banks to bother with, especially if you have to pay most of your profits to the programmers behind it so they don't leave and do it themselves.
  - marshallp 14y ago
    There's been plenty of discussions on HN about getting into HFT and the advice given is that it's too expensive for the average guy.

yummyfajitas 14y ago

HFT is the result of barriers to entry falling. Any software engineer can save money for a couple of years and start an HFT shop.