On: A veteran programmer explains how the stock market became “rigged”

[icebraining]

Then why hasn't a stock exchange that imposes a transaction fee appeared and pulled in all traders, leaving the HFTs behind?

This is what I can't understand about this stories, and makes me doubt the claims against the HFTs.

[crdoconnor → icebraining]

network effects work heavily against new exchanges. it's not like starting a SaaS to deliver email.

[yummyfajitas → crdoconnor]

This is nonsense. There is a lot of competition in exchanges, a new one is sprouting up every few months. Not all of them are able to get Michael Lewis to shill for them, but a new ATS/Dark Pool/etc sprouting up is hardly uncommon.

You should consider asking yourself why most such trading networks actually go to great effort to encourage HFTs to trade on them. (Hint: no liquidity no customers.)

[cpwright → crdoconnor]

But there are already 13 of them that are regulated. At this point BATS owns 4 of them, the only reason to have 4 different exchanges is to have slightly different rule sets and fee structures. Any one of the existing exchanges (especially the small ones) could change their rule set or fee structure if they thought it would bring volume.