3 ms·
I don't know why it's bad that people who don't need low latency are allowed to not pay for it. For years, mil-spec GPS time was masked with randomness and una
by 001sky 13y ago
I don't know why it's bad that people who don't need low latency are allowed to not pay for it.
For years, mil-spec GPS time was masked with randomness and unavail to the public. Why not do this with the markets? The regulators only care about mean prices being unbiased. They should equilibriate just fine with some non-sequential information introduced. Why or why not?
- cpwright 13y agoThe regulator cares about more than just the mean price. The idea behind Reg NMS is that anyone who places an order at a protected venue should get the best price available, not just something close. It isn't enough for the differences to just average out, because some people get poor execution in one direction, and others get poor execution in the other.
- 001sky 13y agoAgree but consider this: If the timing is perfectly tractable the system is gamed. A small amount of noise that prevents manipulation is a good thing over time for the market. It means the stock is going to have less vol which increases the value of the market equity given constant cash flows. That's another policy goal more broadly. That is, if it works this way.