> See, people who write "bad" algorithms already get punished by the market and lose money. You've misunderstood what is meant by "bad" algorithms. They aren't

> See, people who write "bad" algorithms already get punished by the market and lose money. You've misunderstood what is meant by "bad" algorithms. They aren't universally "bad". The vast majority of the time they make a ton of money. The problem is, the reason they make money is because they have limited safe guards that protect it from doing something stupid 99% of the time, but the remaining 1% is left a mess in order to ensure that 99% of the time they execute faster than the next guy. Unfortunately, they are an increasingly dominant force during that 1% window because they are a few nanoseconds faster to make a trade the rest of the time. > What would a regulation against "bad" algorithms even look like? You don't regulate the algorithm, just like you don't regulate against bad traders. What you do is set the rules so that the risks & rewards favour a healthy ecosystem. If sub millisecond trading yielded no benefit, it'd do a lot to prevent problems.