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No; he’s saying that you have to choose: if you really believe that the same information should be equally available to everyone, you need to admit HFT that rea
by stephencanon 13y ago
No; he’s saying that you have to choose: if you really believe that the same information should be equally available to everyone, you need to admit HFT that reacts to that information as it becomes available.
It’s perfectly reasonable to argue that shouldn’t be allowed, but then you are (implicitly) arguing that either (a) complete market information should not be publicly available or (b) there should be some mechanism which prevents some individuals from acting on that information as quickly as they would like to.
- wavesounds 13y agoWe're talking about different things, actually responding quickly to information is not the problem, gaining access to it before other people can is, which is what Michael Lewis's book was all about. Nobody is saying Algorithmic Trading is wrong, just front-running in HFT that's the problem.
- tptacek 13y agoLook more carefully at Lewis' scenario: there are two kinds of entities that have access to secret information: informed institutional traders and HFTs. Lewis is effectively arguing that there should be only one.