High-Speed Traders Rip Investors Off, Michael Lewis Says
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Re: High-Speed Traders Rip Investors Off, Michael Lewis Says
#2Its like saying computerized grocery checkout machines rip off cashiers.
Re: High-Speed Traders Rip Investors Off, Michael Lewis Says
#3Its like saying computerized grocery checkout machines rip off cashiers.
If computerized grocery checkout machines would stop halfway through the 10 cases of discount soda you bought to raise the price on the remaining 5 cases, then this analogy would be what the article is talking about.
Re: High-Speed Traders Rip Investors Off, Michael Lewis Says
#4The argument in favor of HFT is that it both increases liquidity of markets and reduces the spread - both favorable to most investors.
But they can actually see you attempting to buy stock, step in front of you, buy it before you, and then try to resell it to you for a higher price? That's bad behavior and reduces confidence in the free market. There needs to be regulation around things like that.
Re: High-Speed Traders Rip Investors Off, Michael Lewis Says
#5It's like saying Wal-Mart rips off its customers, because they use computers and their market power to buy stuff cheaply, and then they turn right around and sell it to their customers for more, making a profit 100% of the time.
Re: High-Speed Traders Rip Investors Off, Michael Lewis Says
#6It's like saying Wal-Mart rips off its customers, because they use computers and their market power to buy stuff cheaply, and then they turn right around and sell it to their customers for more, making a profit 100% of the time.
No, its like saying Walmart watches as you put the item in your shopping cart, and raises the price before you can get to the cashier.
Re: High-Speed Traders Rip Investors Off, Michael Lewis Says
#7The original# piece somehow made it through the cracks at HN.
https://news.ycombinator.com/item?id=7500426
6 points by dcaisen 4 hours ago | flag | discuss [no comments]
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# By Michael Lewis, published in the NYT today
Re: High-Speed Traders Rip Investors Off, Michael Lewis Says
#8The argument in favor of HFT is that it both increases liquidity of markets and reduces the spread - both favorable to most investors. But they can actually see you attempting to buy stock, step in front of you, buy it before you, and then try to resell it to you for a higher price? That's bad behavior and reduces confidence in the free market. There needs to be regulation around things like that.
The idea that an HFT can see you attempt to buy stock before it goes to the market is not true and would be against the law if it happened.
Re: High-Speed Traders Rip Investors Off, Michael Lewis Says
#9It's like saying Wal-Mart rips off its customers, because they use computers and their market power to buy stuff cheaply, and then they turn right around and sell it to their customers for more, making a profit 100% of the time.
The problem is not the HFT firms buying stock cheaply and reselling it for a profit. As the article points out the problem is investors placing a buy order, and the HFT firms seeing this buy order and snapping up the remaining stocks before the original buy order is fully completed.
This has the negative side effect of essentially making it impossible to buy for the listed price, even when there are supposedly enough shares available for purchase at that price.
As I pointed out in another comment, it's not just buying low and selling high; it's like Walmart interrupting a customer to jack up the prices on a purchase in the middle of that purchse, precisely because that customer is buying that specific item.
Re: High-Speed Traders Rip Investors Off, Michael Lewis Says
#10Its like saying computerized grocery checkout machines rip off cashiers.
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