4 ms·
As a percentage of enterprise value, what is wrong with even larger minimal trading increments? There is no "valuation" resolution on a $1B and up company, that
by 001sky 13y ago
As a percentage of enterprise value, what is wrong with even larger minimal trading increments? There is no "valuation" resolution on a $1B and up company, that hinges on 1/0000th of a percent measurements in the residual value of the equity. Unless people arey marking to theoretical models purely for derivative purposes and trying to maintain a dynamic hedge with increasingly perfect resolution and without cost.
- yummyfajitas 13y agoLarger minimal trading increments increase the cost of speculation, thereby reducing the accuracy of prices. What good reason is there for speculators to pay more for liquidity?
- 001sky 13y agothe accuracy of prices The resolution issue on prices is not clear-cut. Liquidity is good, and I'm happy to have it. But infinite resolution (price, timing) trades do not per-se follow. And they ultimately, themselves, have a feedback loop. INstitutionalized front running (changing examples) is not benign liquidity, for example. Dynamic hedging would at least be a legitimate use, but absence its availability should be priced in accordingly in seperate markets.