

Declawing Speed Traders Is Goal of Stock Market Revamp Proposal - ptype
http://www.bloomberg.com/news/2014-02-20/declawing-speed-traders-is-goal-of-stock-market-revamp-proposal.html

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tutufan
With due apologies to Mencken, this sounds like market Puritanism: the
haunting fear that someone somewhere might be making money. In truth, whenever
read closely, the "problems" these proposals aim to solve invariably turn out
to be nonsense.

There is one truly good reason to put an end to the HFT arms race: it's
absorbing the time and talents of some of the greatest minds of our
generation. This isn't just true of HFT, though--it's a problem for finance in
general. If we want these people doing science instead, though, we're going to
have to pay them to do it. Currently we're not.

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foobarqux
There is also massive expenditure into things that have little value. This is
wealth destruction.

The real issue is that time in the real world will stay continuous so high
speed traders will still have an advantage across markets and from information
updates that occur outside an individual exchange.

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tutufan
So?

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foobarqux
So the result may not be what you expect. It's very hard to identify all the
unintended implications and it doesn't seem like proponents of this scheme
(which I like in principle) have thought of any.

How do you deal with instruments that trade on both a foreign and local
exchange? Or instruments that are highly correlated, one of which trades in a
continuous market?

