4 ms·

a "super liquid" stock market as you put it means lower spreads... that benefits you. The people who are losing money because of high frequency trading are alg

a "super liquid" stock market as you put it means lower spreads... that benefits you. The people who are losing money because of high frequency trading are algo traders... that is not you (unless you're a hedge fund)

lsd5you 17y ago
Your reasoning is wrong. Limiting the frequency of trades (by some mechanism) does not imply more money going to brokers or higher spreads. (It may effect clearing times, certainty over being able to buy quantities in short times & exact prices). Then the second part is wrong also, as the low frequency traders will lose money, getting on average worse deals. The high frequency traders will make sure you get a worse price, because any price spike you may have fortuitously gotten will be removed. Alternatively you can just reason that the high freq traders are costing money (using resources, making profits) and ergo must be extracting money out of the market. You'll have to make a much better case for the value for such liquidity.
- andylei 17y ago
  >because any price spike you may have fortuitously gotten will be removed this is true, but "fortuitously" doesn't always apply. "price spikes" could be high or low, and could affect you positively or negatively. with out high frequency traders, it's equally likely that you get a fortuitous or unfortuitous spike. what high frequency traders do is even out prices so that they are always "right". they ensure that when you trade, you aren't trading on some random spike and are instead trading at the correct market price. despite what you think, real low to medium frequency traders enjoy having correct market prices at all times, which is what high frequency guys ensure.
  - lsd5you 17y ago
    Sorry, this is also wrong. Why is it equally likely? A high spike will be when they buy and a low when they sell. As a low freq trader you'll get worse prices buying/selling on average as a result. Your notion of the existence of a precise right/correct price for anything is an illusion, forget about it, This is why it is best to start with big picture reasoning - in this case that they make money and ergo others lose/make less in a zero sum market with only tangential impact on real economic activity.

lsd5you 17y ago

Your reasoning is wrong. Limiting the frequency of trades (by some mechanism) does not imply more money going to brokers or higher spreads. (It may effect clearing times, certainty over being able to buy quantities in short times & exact prices). Then the second part is wrong also, as the low frequency traders will lose money, getting on average worse deals. The high frequency traders will make sure you get a worse price, because any price spike you may have fortuitously gotten will be removed. Alternatively you can just reason that the high freq traders are costing money (using resources, making profits) and ergo must be extracting money out of the market. You'll have to make a much better case for the value for such liquidity.

andylei 17y ago
>because any price spike you may have fortuitously gotten will be removed this is true, but "fortuitously" doesn't always apply. "price spikes" could be high or low, and could affect you positively or negatively. with out high frequency traders, it's equally likely that you get a fortuitous or unfortuitous spike. what high frequency traders do is even out prices so that they are always "right". they ensure that when you trade, you aren't trading on some random spike and are instead trading at the correct market price. despite what you think, real low to medium frequency traders enjoy having correct market prices at all times, which is what high frequency guys ensure.
- lsd5you 17y ago
  Sorry, this is also wrong. Why is it equally likely? A high spike will be when they buy and a low when they sell. As a low freq trader you'll get worse prices buying/selling on average as a result. Your notion of the existence of a precise right/correct price for anything is an illusion, forget about it, This is why it is best to start with big picture reasoning - in this case that they make money and ergo others lose/make less in a zero sum market with only tangential impact on real economic activity.