41–50 of 238 posts
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Something like a minimum holding time is a more reasonable approach. However, there's not a clear cut answer in any case.
Before you start talking about what would be effective in reducing the amount of high frequency trading you have to make the case that reducing HFT is a good goal in the first place. This is a challenging case to make.
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There is no good argument for this. The problems you think it might solve...it doesn't solve. Hint: if the minute long auction closes at precisely the minute boundary at what time do you want to put your orders in?
Hint: If you can't see the orders during that minute, it doesn't matter when you submit...
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Your comment, while snarky, isn't a refutable statement. As it stands you seem to be endorsing some position, which I'm inferring is in favor of Sanders and maybe in opposition to HFT. I can't really tell what you're getting at precisely though. > Remember how he was widely pronounced deranged for suggesting that there should be a fee associated with trades? How it would destroy the market? Who said this, specificall…
It's mostly about how skimming a tiny bit of cash off of every trade is perfectly good for the exchanges to do to john Q public, but heaven help us if real traders have to put up with that. I have no idea if Sanders' plan was good or not, I'm more grousing about how critically important principles of how the market is supposed to work seem to vary depending on whether you're talking about consumer-level investments v…
Who is "skimming a tiny bit of cash off of every trade"? Do you buy into the notion that HFT is somehow so fast that it can travel back in time and jump ahead of orders that have just executed?
Someone will call this a submarine article for IEX but I don't think this is far, it was written as an oped by Dave Swensen, the famous head of Yale's endowment fund. Just so the issue is clear, almost all hedge funds don't do active/passive also called maker/taker, but rather they pay a flat fee per share traded to their sell side broker. The sell side broker will then collect/pay the exchange fees. This means that…
Odds are clients like the current system because they know exactly how much executing a 100k share block will cost in commissions. If they didn't, there are plenty of competitive equities brokers who will offer pass-through pricing.
And saying the shortest queue is best makes no sense. Most exchanges with short queues have laughably low market share. The lines are short for a reason, because they get serviced more slowly. Otherwise it'd be free money for fast HFTs to fill those lines up and get trades before someone on another exchange.
I think this is well known. The real problem is that the traders are much smarter than the regulators, and their ability to obscure far exceeds the regulators' ability to untangle. Incentivise your regulators better and you might end up attracting some real talent who can unearth the tricks the crafty traders pull every day (I am an ex trader, from a bulge bracket IB, and trust me, what some of these guys do is not a…
I hadn't heard of this. But then again, I'm not an institutional investor and I don't place a lot of trades.
Remember when Sanders proposed a small fee on every trade on Wall Street to discourage high frequency trading and to recoup some value from the market? Remember how he was widely pronounced deranged for suggesting that there should be a fee associated with trades? How it would destroy the market? Funny, that.
Fees on trading would not meaningfully discourage high frequency trading and would just be passed on to buyers and sellers of stock in the form of larger bid/ask spreads.
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Also, there is an argument for more time controlled auctions rather than giving everyone a continuous look at the order book. Much like the start of day auction, you could have something similar every minute, where traders submit prices but matching only occurs at the end of each minute. This would certainly put an end to the annoying high/low ticking that happens all too often.
There is no good argument for this. The problems you think it might solve...it doesn't solve. Hint: if the minute long auction closes at precisely the minute boundary at what time do you want to put your orders in?
Earlier quoted context omitted.
I think higher spreads would “slow” highest frequency trading. They cross the spread many more times per dollar than regular investors to it costs them more. High frequency trading only works inasmuch as transaction costs are low, at least that’s my understanding.
> I think higher spreads would “slow” highest frequency trading. They cross the spread many more times per dollar than regular investors to it costs them more. If I understand your thesis correctly, you want to decrease liquidity in order to reduce the speed at which high frequency trading can be executed? I'm not following your point about transaction costs - or do you mean that you'd limit HFT by reducing liquidity…
The “thesis” is that by putting a small tax on transactions, you will decrease the profitability of trading strategies that involve trading securities many times therefore discouraging them.
Liquidity is a trickier concept. I’m not sure if it has a consistent measurement definition. If you define liquidity as turnover or something close, then lowering trading frequency lowers liquidity by definition. How that affects liquidity in the practical sense for a “regular” investor is an uncertainty. It’s hard for me to imagine that a trader that holds stock for an average of 1 year will have more trouble getting in or out of Google stock, but maybe I’m wrong.
Remember when Sanders proposed a small fee on every trade on Wall Street to discourage high frequency trading and to recoup some value from the market? Remember how he was widely pronounced deranged for suggesting that there should be a fee associated with trades? How it would destroy the market? Funny, that.
Your comment, while snarky, isn't a refutable statement. As it stands you seem to be endorsing some position, which I'm inferring is in favor of Sanders and maybe in opposition to HFT. I can't really tell what you're getting at precisely though. > Remember how he was widely pronounced deranged for suggesting that there should be a fee associated with trades? How it would destroy the market? Who said this, specificall…
> Who said this, specifically? What is your point in bringing it up?
Sanders. The point in bringing it up is to point out the irony that Wall Street already does this behind the scenes, but people called the Senator crazy for proposing it.
> I'm getting the sense that you'd be in favor of this - can you tell me why, in your own words, you believe we should be trying to "recoup value" from the activities of high frequency traders?
Shortest terms I can put this is: our country needs the money that Wall Street siphons off of the economy. We need more government money to educate, house, feed, and care for people. High frequency trading, unlike traditional investment, is not a "mom and pop" thing, it's a tool only accessible to the wealthy to enrich themselves. Thus, we should disincentivize it in order to generate tax revenue and discourage practices that are not accessible to shareholders.
Remember when Sanders proposed a small fee on every trade on Wall Street to discourage high frequency trading and to recoup some value from the market? Remember how he was widely pronounced deranged for suggesting that there should be a fee associated with trades? How it would destroy the market? Funny, that.
You are aware that HFT is essentially dead? It isnt profitable anymore and most of those firms are failing. Trading situations that allow for easy outsized profits like that disappear very fast.