What is the problem with high-speed trading in your opinion? I see a lot of people wanting a Financial Transactoons Tax, but I have yet to see étaples of what it would accomplish or prevent?
The arguments in favour of speculation, in general, rest on assumption of intelligent trading and diversity of strategies. The short term range, however, is entirely up to software tools, whose decisions are stupid and have identical systematic errors. I think the short term trading is going to go out with a bang first time there’s any interesting software-level exploitation—either a direct hack or adoption of one bot whose decision theory makes non-trivial use of understanding of other instances of itself. Bang as in, a millisecond level bubbles and crashes followed by decision to roll it back and regulate or prohibit.
As have been pointed out on e.g marginalrevolution.com, one reason HFT is so popular is because the minimum stock price increment is one cent. HFT might conceivably lose much of its allure if this lower bound is changed to, say, .01 cent.
I’m not convinced trading must be intelligent to provide beneficial information to the market. I’m also not convinced all HFT systems have identical systematic errors. Can you give some examples?
What is the problem with high-speed trading in your opinion? I see a lot of people wanting a Financial Transactoons Tax, but I have yet to see étaples of what it would accomplish or prevent?
http://www.economist.com/node/21525456 for the starter.
The arguments in favour of speculation, in general, rest on assumption of intelligent trading and diversity of strategies. The short term range, however, is entirely up to software tools, whose decisions are stupid and have identical systematic errors. I think the short term trading is going to go out with a bang first time there’s any interesting software-level exploitation—either a direct hack or adoption of one bot whose decision theory makes non-trivial use of understanding of other instances of itself. Bang as in, a millisecond level bubbles and crashes followed by decision to roll it back and regulate or prohibit.
Wow, sorry about the stupid autocorrects above.
As have been pointed out on e.g marginalrevolution.com, one reason HFT is so popular is because the minimum stock price increment is one cent. HFT might conceivably lose much of its allure if this lower bound is changed to, say, .01 cent.
I’m not convinced trading must be intelligent to provide beneficial information to the market. I’m also not convinced all HFT systems have identical systematic errors. Can you give some examples?