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Anybody else think this is like, inherently bad? I mean making money from nothing, producing nothing, doing no service to anybody. The only way you could possib
by aortega 14y ago
Anybody else think this is like, inherently bad? I mean making money from nothing, producing nothing, doing no service to anybody. The only way you could possible get that billion without doing nothing is to take it from other people, essentially stealing it. Why is this legal?
- ihodes 14y agoRenTech doesn't do "nothing". They do a ton of research and write a lot of code. Then, they purchase securities from people who want to sell them, and sell them to people who want to buy them. Why is this more palatable if there is a trader in between?
- NkVczPkybiXICG 14y agoThey create a more efficient market. Ensuring, for example, that the future price of a commodity matches the spot price when the future expires. They provide an anonymous financial service.
- aortega 14y agoTo a financial-impaired mind like mine those looks like great explanations, thanks you all that responded me, now it does seems a little more fair.
- jrockway 14y agoIs your insurance company stealing from you when your house doesn't burn down? When someone buys or sells a security, they take on risk in exchange for money. When someone is on the other end of the transaction, they give up money to reduce their risk. That seems fair to me. Just because it's a zero-sum game with respect to money doesn't mean it's a zero-sum game in totality. It's just that you can buy less iPods with risk than you can buy with cash, so you mentally overvalue cash and undervalue the lack of risk.
- boothead 14y agoThey aren't producing anything, but they are providing a service. Algorithmic futures traders are typically uncorrelated with for example the S&P so pensions funds use their services to smooth out volatility and generate better returns.