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First, the "benefit" to the counterparties is infinitesimal. The predator is going to scape up the market at as lost cost as possible. Second, shares don't magi

by jules 13y ago

First, the "benefit" to the counterparties is infinitesimal. The predator is going to scape up the market at as lost cost as possible. Second, shares don't magically lose underlying value just because an investment fund is forced to sell. Longer term the price will go to whatever it would go anyway. Investors who bought did not lose that $5. Besides, even with HFT involved the short term price will still drop to $100 so everyone holding those shares still "suffers". Suffice it to say that this is a ridiculous argument which I'm sure you are not actually making but I'm just pointing this out. Third, because of shady HTF practices like flooding the exchange with orders, it's most likely actually hurting the counterparties, impeding their ability to adjust their price. Now tell me, what social good did the HFT middle man bring?

yummyfajitas 13y ago
Supply goes up - price goes down. If whales weren't worried about price impact they wouldn't be hiding their offers (typically by running HFT systems of their own, or renting them) to begin with. Third, because of shady HTF practices like flooding the exchange with orders, it's most likely actually hurting the counterparties, impeding their ability to adjust their price. I don't understand. Counterparties want to buy and a predator is improving prices. How does this hinder them? I'm not asserting that predation is socially good or bad. It marginally increases market efficiency and causes small players to lose less money to the big boys - that's the extent of my claims. I just don't understand why everyone seems to think helping the big players is somehow socially beneficial. What's good for Goldman is good for America?
- jules 13y ago
  I see you ignored the fact that counterparties are actually only "benefiting" infinitesimally. Convenient. > I don't understand. Counterparties want to buy and a predator is improving prices. How does this hinder them? That's not what I said. It's not the offers themselves that are hurting, it's the intentional clogging up of the exchange by the HFT traders which in effect locks out everybody else. > marginally increases market efficiency and causes small players to lose less money to the big boys As in trades get executed a femtosecond earlier and for a infinitesimally different price, if you conveniently ignore shady practices like clogging up exchanges? Yea, that is most definitely worth the big bucks the HFT traders are making on the other side of the transaction. /s > I just don't understand why everyone seems to think helping the big players is somehow socially beneficial. What's good for Goldman is good for America? You pick Goldman Sachs as an example because you know people will have an emotional reaction, and ignore pension funds etc. This is an argument designed to run on people's emotions. Besides, Goldman Sachs, unlike pension funds, is perfectly capable and in fact does do HFT of its own. Eradicating HFT is socially beneficial because it will (A) remove a bunch of wasted effort to be just a tiny bit faster than everybody else (B) remove the HFT middle man tax for investors who just want to trade with other investors.
  - yummyfajitas 13y ago
    You claim the benefit is "infinitesimal" and I have no idea why or how you would claim this. It's not the offers themselves that are hurting, it's the intentional clogging up of the exchange by the HFT traders which in effect locks out everybody else. Exchanges don't get "clogged" except in rare cases like the facebook IPO. Goldman Sachs, unlike pension funds, is perfectly capable and in fact does do HFT Pension funds do run HFT in order to hide their trades. They either build it themselves or rent an algo from pipeline/etc. Look, you clearly don't know much about the topic beyond what you read on zerohedge. I'll leave you to it.
    - jules 13y ago
      > You claim the benefit is "infinitesimal" and I have no idea why or how you would claim this. Where do we see all the genuine long term investors being happy with HFT because they benefit so much from them? That's right, they aren't. > Exchanges don't get "clogged" except in rare cases like the facebook IPO. Then why do HFT traders do this? > Pension funds do run HFT in order to hide their trades. They either build it themselves or rent an algo from pipeline/etc. Sure, as I said, either you lose to the HFT middle man, or you lose by having to invest in your own pointless infrastructure in the cat and mouse zero sum game.

by jules 13y ago

yummyfajitas 13y ago

Supply goes up - price goes down. If whales weren't worried about price impact they wouldn't be hiding their offers (typically by running HFT systems of their own, or renting them) to begin with. Third, because of shady HTF practices like flooding the exchange with orders, it's most likely actually hurting the counterparties, impeding their ability to adjust their price. I don't understand. Counterparties want to buy and a predator is improving prices. How does this hinder them? I'm not asserting that predation is socially good or bad. It marginally increases market efficiency and causes small players to lose less money to the big boys - that's the extent of my claims. I just don't understand why everyone seems to think helping the big players is somehow socially beneficial. What's good for Goldman is good for America?

jules 13y ago
I see you ignored the fact that counterparties are actually only "benefiting" infinitesimally. Convenient. > I don't understand. Counterparties want to buy and a predator is improving prices. How does this hinder them? That's not what I said. It's not the offers themselves that are hurting, it's the intentional clogging up of the exchange by the HFT traders which in effect locks out everybody else. > marginally increases market efficiency and causes small players to lose less money to the big boys As in trades get executed a femtosecond earlier and for a infinitesimally different price, if you conveniently ignore shady practices like clogging up exchanges? Yea, that is most definitely worth the big bucks the HFT traders are making on the other side of the transaction. /s > I just don't understand why everyone seems to think helping the big players is somehow socially beneficial. What's good for Goldman is good for America? You pick Goldman Sachs as an example because you know people will have an emotional reaction, and ignore pension funds etc. This is an argument designed to run on people's emotions. Besides, Goldman Sachs, unlike pension funds, is perfectly capable and in fact does do HFT of its own. Eradicating HFT is socially beneficial because it will (A) remove a bunch of wasted effort to be just a tiny bit faster than everybody else (B) remove the HFT middle man tax for investors who just want to trade with other investors.
- yummyfajitas 13y ago
  You claim the benefit is "infinitesimal" and I have no idea why or how you would claim this. It's not the offers themselves that are hurting, it's the intentional clogging up of the exchange by the HFT traders which in effect locks out everybody else. Exchanges don't get "clogged" except in rare cases like the facebook IPO. Goldman Sachs, unlike pension funds, is perfectly capable and in fact does do HFT Pension funds do run HFT in order to hide their trades. They either build it themselves or rent an algo from pipeline/etc. Look, you clearly don't know much about the topic beyond what you read on zerohedge. I'll leave you to it.
  - jules 13y ago
    > You claim the benefit is "infinitesimal" and I have no idea why or how you would claim this. Where do we see all the genuine long term investors being happy with HFT because they benefit so much from them? That's right, they aren't. > Exchanges don't get "clogged" except in rare cases like the facebook IPO. Then why do HFT traders do this? > Pension funds do run HFT in order to hide their trades. They either build it themselves or rent an algo from pipeline/etc. Sure, as I said, either you lose to the HFT middle man, or you lose by having to invest in your own pointless infrastructure in the cat and mouse zero sum game.