3 ms·
I really like your idea of allowing sub-penny ticks in the highly liquid stocks as a way of tilting algo trading away from the latency arms race. Unfortunately
by AndrewBissell 13y ago
I really like your idea of allowing sub-penny ticks in the highly liquid stocks as a way of tilting algo trading away from the latency arms race. Unfortunately, it probably runs too counter to the uninformed "no one should be trading to make $0.01 per transaction!" popular perspective for the SEC & exchanges to implement it.
- kasey_junk 13y agoAs someone who actually makes a living in HFT, if you really wanted to get rid of me, sub-penny ticks would be the single worst thing I can think of. There is literally no transaction tax that would make trading unprofitable. 2 zero's worth of decimilazation though and I have to go find honest work.
- yummyfajitas 13y agoI'd only get rid of you insofar as you are fighting over latency. If you can deliver price improvement or useful market depth there is still a place for you.
- sseveran 13y agolatency arb is still important to keep venues in sync.
- kasey_junk 13y agoI think decreasing the minimum bid/ask spread value would make it very difficult to continue doing traditional market making. I think that exchanges would then need to add some other incentives/perks to ensure liquidity providers stayed on their exchange, which starts to sound more and more like a specialist system which I'm generally against. Of course, I don't think there is some natural right for market makers to exist. I do really like the idea of an extremely small tick size as it much more elegant than a transaction tax.