3 ms·
The most obvious and simplest thing wrong with open outcry and human market makers is the number of specialists that it takes to handle a full universe of stock
by smoorman1024 13y ago
The most obvious and simplest thing wrong with open outcry and human market makers is the number of specialists that it takes to handle a full universe of stocks. A small electronic trading team can provide/take liquidity in 8000 stocks or greater. If you need specialists you are going to have to provide a living salary for every single specialist who will only be able to handle 20 stocks at most. The cost of trading for the end consumer is higher.
- madaxe_again 13y ago> The cost of trading for the end consumer is higher. What about when you factor in the artificially elevated buys and artificially depressed sells as a result of HFT?
- smoorman1024 13y agoWhat specifically are you referring to?
- madaxe_again 13y agoDid you read the article? :) Pre-emptive buys driving up the price across exchanges.
- aet 13y agoThe cost of trading is still drastically lower now than it was with open outcry. There were a number of federal indictments related to NYSE specialists blatently ripping off retail customers. http://www.nytimes.com/2005/04/13/business/13nyse.html http://www.nytimes.com/2005/04/13/business/13nyse.html