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SEC rethinks decimals but has nothing to say on high frequency trading? Somehow increasing the spread is being considered but allowing trades to stay at the ma

by amalag 14y ago

SEC rethinks decimals but has nothing to say on high frequency trading? Somehow increasing the spread is being considered but allowing trades to stay at the markets for 1 second is not? What is going on? Europe is enforcing 1/2 second trades: http://www.tradersmagazine.com/news/hft-high-frequency-trading-110345-1.html http://www.tradersmagazine.com/news/hft-high-frequency-tradi... Do we really need market makers to have trades for less than 1 second anyway? That really contributes to liquidity in the markets?

jpdoctor 14y ago
> What is going on? Regulatory capture is my bet.
strongvigilance 14y ago
It contributes to liquidity in that it allows market makers to quote tighter prices, since they have less risk of adverse selection.
JumpCrisscross 14y ago
Increasing the tick size hurts high frequency trading by making it costlier to rapidly enter and exit positions.
- strongvigilance 14y ago
  Not really - a lot of HFT earns money from liquidity provision, where a higher tick value would increase profitability, since they're entering and exiting trades passively attempting to earn the bid/ask spread.
  - deleted 14y ago
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