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Any statisticians care to estimate the probability a firm could do this without gaming the system? If you ask a startup to create a simple computer-based tradi
by marze 17y ago
Any statisticians care to estimate the probability a firm could do this without gaming the system?
If you ask a startup to create a simple computer-based trading system that allow the buying and selling of stocks, how much would capital would they need? Not much. Trading systems should be operated by a non-profit, this sounds like a hefty and unnecessary trading tax.
- byrneseyeview 17y agoYou can trivially opt out by not buying publicly-traded stocks. If you'd prefer the 5-20% transaction costs of buying into private companies, so long as Goldman doesn't get .05% of your purchase in exchange for making a market, nobody is going to stop you.
- gaius 17y agoBut that's not true. The essence of exchange trading is that you never see your counterparty. You say to the exchange"I want to buy X", they say to the exchange "I have X to sell" and the exchange makes the transaction. The only way to compete is to offer a better price, otherwise you'll never get matched! So Goldman are making a large profit yet, but that necessarily is less than the total profit that could have been made by its rivals had Goldman not been there.