Heh. Yeah I remember that, it was wild.
I don’t think most people are aware of the physical reality of what HFTs are doing.
Relevant quote from your wikipedia:
In May 2014, a CFTC report concluded that high-frequency traders "did not cause the Flash Crash, but contributed to it by demanding immediacy ahead of other market participants
Or as the article I linked puts it:
What turns out is happening is he’s sitting physically in lower Manhattan when he makes his trades. When he pushes the “buy” button, the signal from his computer travels up the fiber optics along the west-side highway of Manhattan and through the Lincoln Tunnel. On the other side of the Lincoln Tunnel is one of the 13 stock exchanges, called the BATS Exchange founded by high-frequency traders.
They’re sitting there, and they get the signal that he wants to buy first. … They can see what he wants to do. They discern his desire to buy Microsoft, and they have faster connections to the 12 other exchanges that are scattered across New Jersey, and they race him to the other exchanges, buy all the Microsoft in front of him, and sell it back to him at a higher price.
HFT algorithms jumping on stubs seems pretty plausible to me. The whole thing is way too black box at this point, it’s ridiculous that there isn’t a clear answer.
Is there any reason not to regulate HFT out of existence ?
I understand that the stock market can be beneficial but High Frequency Trading?
It’s just a parasite to the economy, sucking money without any benefit.
Remember: Wealthy people exploiting the system are resourceful. Poor people exploiting the system are criminals.
Because wealthy people can afford lawyers and accountants to figure out how to exploit the system without breaking laws (or at least minimize the chance of going to trial, and failing that, minimize the sentence/fines.)
Its the system that’s broken, see? That’s who’s killing people now and future, not me and Elon and Jeff (AND Tim ytf does he always get a pass???) Its like, don’t hate the playa, hate the game, bro! And besides, who voted for the schmucks who set all this up anyway? I didn’t, I don’t even vote lol. No, it’s all of you! So really, it’s your fault. You’re welcome!
