High-Speed Trading Isn't About Efficiency—It's About Cheating • Hacker News Board

Re: High-Speed Trading Isn't About Efficiency—It's About Cheating

#121

Post by vasilipupkin » Mon, Feb 10, 2014, 1:01 AM UTC

joshsegall wrote: post #79

vasilipupkin wrote: post #49

Here is the problem that I have with this whole "socially useful" line of reasoning: Do we have philosopher kings or benevolent rules who are able to accurately designate social usefullness and ban or allow things on the basis of it? Is facebook or snapchat socially useful? Are hamburgers socially useful? what about french fries? Whether or not HFT is socially useful is irrelevant. Since there is no harm to a long te…

It's not about banning or allowing, it's about counting the true costs and benefits of the trade, not the immediate effects. And you don't need philosopher kings to do this, just basic math and science. This particular article may not make a good case for the harm of HFT, but that doesn't mean there isn't any. And yes, there are serious researchers that are pointing out hidden costs for things like facebook, hamburge…

Right, by this logic literally anything might have a hidden cost that exceeds the demonstrable benefit. The onus is on the ones crying wolf to present concrete evidence. Otherwise, we will end up living in Soviet Union or Nazi Germany ( yes yes I know, Godwin's law)

Re: High-Speed Trading Isn't About Efficiency—It's About Cheating

#122

Post by pbhjpbhj » Mon, Feb 10, 2014, 5:55 AM UTC

wcummings wrote: post #105

pbhjpbhj wrote: post #58

Earlier quoted context omitted.

> allows you to trade between markets without fearing that you're somehow losing out // The corollary to that is that your trades as a mere producer are never going to be [indirectly] profitable because all potential profits from varying price have been swept up by others who're not producing goods/services but instead are only operating to extract value that would otherwise go to producers.

Arbitrage provides an important financial service to the market... Arbitrage reduces / eliminates price differences across markets. It improves market efficiency. It's really concerning how little people itt understand about markets

>It improves market efficiency. //

Is it worth the cost?

Re: High-Speed Trading Isn't About Efficiency—It's About Cheating

#123

Post by aninhumer » Mon, Feb 10, 2014, 4:32 PM UTC

pbhjpbhj wrote: post #122

wcummings wrote: post #105

Earlier quoted context omitted.

Arbitrage provides an important financial service to the market... Arbitrage reduces / eliminates price differences across markets. It improves market efficiency. It's really concerning how little people itt understand about markets

> It improves market efficiency. // Is it worth the cost?

What cost? The only disadvantage is to traders who were previously benefiting from price differences, which only exist at the expense of entities who are losing out due to the same differences.