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SEC approves Texas Stock Exchange, first new US integrated exchange in decades

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Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#441

Post by drob518 »

jiggawatts wrote: post #437
drob518 wrote: post #435

Earlier quoted context omitted.

So, seconds good but milliseconds bad? That seems rather arbitrary.

The boundary is "arbitrary", but clearly there has to be one, otherwise we're all nodding in agreement as trading speed heads inexorably towards Plank time units. We have some convenient "lines in the sand" that we can use as a guide: - To make trading fair globally, the round-trip time for light around the planet could be multiplied a couple of times. That's about a second. - The fastest possible time a human can pa…

The only non-arbitrary boundary is the one set by physics. Everything else is arbitrary. There are ways to greatly reduce front-running of orders, but that actually is an orthogonal issue to HFT and microstructure level trading.

Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#442

Post by scrlk »

pnut wrote: post #436
KPGv2 wrote: post #398

Earlier quoted context omitted.

One other aspect of HFT that is good for the general investor is that HFT injects liquidity, making it easier for a general investor to liquidate their position, which is a desirable thing for human traders. HFT does not magically make human investors engage in more or less speculative behavior. HFT is an easy thing to attack, but I've never encountered a lucid argument for why it's bad. "It's not fair that I'm not a…

Why do we encourage microsecond scale HFT and tout its virtues, yet shut the market down for the majority of every day? Why not go all the way and have markets running 24/7/365?

The NYSE and NASDAQ are planning to move to longer trading hours, 22/5 and 24/5 respectively.

https://www.bloomberg.com/news/articles/2025-03-07/nasdaq-jo... (https://archive.ph/JySaV)

Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#443

Post by philipallstar »

cyanydeez wrote: post #280
this_user wrote: post #24

Earlier quoted context omitted.

There are currently about two dozen national securities exchanges plus a whole lot of alternative trading venues, broker internalisation, and whole market makers that match orders directly. It's a highly fragmented market where one additional exchange will have no substantial impact.

One exchange in a failed, fascist state is a bit different.

Do you mean Texas? Surely not, but worth checking.

Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#444

Post by zmgsabst »

growse wrote: post #417
CyberDildonics wrote: post #387

Earlier quoted context omitted.

A nanosecond order book helps with price discovery the deeper it is, regardless of whether orders clear. This is a claim, it is not being backed up by evidence. I think you're trolling with this one. But you had an advantage typing your comment into a web browser compared to all the people who wrote theirs on paper and put it in an envelope with a stamp. This analogy doesn't make any sense. Why would a person care ab…

> Why do people doing normal trading want to avoid the exchanges that have HFT computers skimming money off their trades? What's "normal trading"? A prop desk at an investment bank? A hedge fund? A pension fund? Someone who's just installed Robin Hood on their phone? Most rational participants want lower trading costs and overheads, smaller spreads etc. HFT provides that - the evidence being "look at what the spreads…

> Could you explain how a market participant who makes one trade a day is negatively impacted by high resolution price discovery?

They’re negatively impacted because the SNR drops when the gain is turned up and causes algorithmic ringing to perturb the price that would be generated by high quality signal.

People who extract money by injecting algorithmic ringing into financial markets are a social parasite.

Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#445

Post by chronic74939 »

smallmancontrov wrote: post #328
JumpCrisscross wrote: post #321

Earlier quoted context omitted.

> Perhaps Texas could use a different trading model that doesn't require ultra high speed trading Wall Street (as in the sell side) is strongly incentivised to stamp out high-speed trading. It undercuts their dealer model. They have tried and failed to come up with an auction model that eliminates HFT without tradeoffs that real investors find unacceptable.

Didn't HFT compete itself out of outsized profitability years ago? So now we get instant super liquidity for pennies?

> Didn't HFT compete itself out of outsized profitability years ago?

No

> So now we get instant super liquidity for pennies?

Not pennies yet. Still dime and quarter range.

Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#446

Post by chronic74939 »

usefulcat wrote: post #306
fijiaarone wrote: post #297

Earlier quoted context omitted.

Nobody in the market cares because everyone in the market are cheaters. There is a huge untapped potential of people outside the current market that do not participate because they know the market is rigged against them. A fair market could be huge, but the trick is keeping it fair. It used to be more fair, and we used to have a healthier economy because of it. It’s not like most of the unfairness in the current mark…

> Most HFT strategies are not only blatantly dishonest but also clearly illegal. What specific strategies are you referring to? Genuinely curious.

> > Most HFT strategies are not only blatantly dishonest but also clearly illegal.

> What specific strategies are you referring to? Genuinely curious.

Any strategy that outperforms his 10-20% passive index fund VTI/QQQ ETF.

HFT is pulling 50-100% annual returns for decades.

HFT is capacity constrained, yes. But anyone would take 100% return every year on “only” $100 million on deployed capital.

Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#447

Post by PopAlongKid »

CGMthrowaway wrote: post #356
calmoo wrote: post #341

Earlier quoted context omitted.

How much fraud we talking? I like to think along Matt Levine's ideas that at least some amount of fraud is acceptable - there will always be some amount of it and under or over-regulation creates a net-negative.

Tough to measure. A couple data points: -NY state estimate $150–200M per year lost to real estate transfer tax fraud and evasion. On $3B receipts that is 5-6% breakage. -Harris County (Houston) found $21M in improper homestead exemptions. On ~$7B receipts that is ~0.3% breakage -Miami-Dade found $35M on $6.5B for improper homestead exemptions, 0.5% breakage For comparison, IRS net tax gap is about 12%

One would expect transfer tax fraud/evasion to be an order of magnitude different from improper homestead exemptions.

Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#448

Post by CGMthrowaway »

PopAlongKid wrote: post #447
CGMthrowaway wrote: post #356

Earlier quoted context omitted.

Tough to measure. A couple data points: -NY state estimate $150–200M per year lost to real estate transfer tax fraud and evasion. On $3B receipts that is 5-6% breakage. -Harris County (Houston) found $21M in improper homestead exemptions. On ~$7B receipts that is ~0.3% breakage -Miami-Dade found $35M on $6.5B for improper homestead exemptions, 0.5% breakage For comparison, IRS net tax gap is about 12%

One would expect transfer tax fraud/evasion to be an order of magnitude different from improper homestead exemptions.

For sure. Probably should be using the total homestead exemption eligibility as the denominator instead of prop tax receipts. Even then transfer tax is a "hill" and the homestead exemption is a "valley." But It's hard enough to estimate any of this data from a keyboard in a few seconds

Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#450

Post by kstrauser »

Ifkaluva wrote: post #420
kstrauser wrote: post #43

Earlier quoted context omitted.

And yet, it’ll be inevitably be seen as the Dollar Store stock exchange. “Well, we IPOed!” “Congratulations!” “…in Texas.” “Do you need to use me as a reference?”

I bet there will be tons of pressure for OpenAI to IPO on this Texas exchange.

“We’ll consider it, but we consider this important and want to be taken seriously.”
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