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Economy
High Frequency Trading is being scrutinised by the Securities and Exchange Commission
2009-07-29

The lightning fast world of high-frequency equity trading is being scrutinised by the Securities and Exchange Commission, amid concerns that this computer-dominated scene is placing less tech-savvy investors at a disadvantage.

High-frequency trading strategies are generally geared towards extracting fractions of profit from trading small numbers of shares in companies, between different trading platforms at hyper-fast speeds. This pace of trading is known as "latency" and requires constant upgrading of computer systems to stay ahead of the pack.

"High-frequency traders are the de facto market makers now,"
Posted by:3dc

#8  Break up the NYSE and NASDAQ?
Posted by: OldSpook   2009-07-29 11:39  

#7  Whereas in Warcraft, most items traded on the auction house have a built-in cost involved in just putting it up, which is partially refundable if the item is sold. There's also a charge if it's sold.

To repeat myself, Blizzard is more worried about providing a fair bourse because their customers have a lot more of a choice (play another game, watch a movie or some TV, go for a walk, etc) than the Dow's customers do; you want to trade some shares in a company listed on the Dow, that's where you have to go.
Posted by: Thing From Snowy Mountain   2009-07-29 09:36  

#6  If you want to know where online trading is going, look at the online sports betting sites.

Trading speed is irrelevant. What matters is speed of reaction to news and your trading strategy.

The real issue for the NYSE, etc is their transaction costs. In a fully automated trading system the actual cost of a trade is almost zero, which makes large numbers of small trades viable.

High frequency is the key word here, which results from low cost of trades.
Posted by: phil_b   2009-07-29 06:40  

#5  Go back to manual trading. Ban the computers. That will slow down a lot of this computerized horsecrap. Have a human actually trade paper.
Posted by: OldSpook   2009-07-29 04:04  

#4  GoldmanGovernment-Sachs lets our governmentitself know when they can arrest someone
There fixed it for you gromky
Posted by: tipper   2009-07-29 02:07  

#3  I was thinking along the same lines; see my comments in the o-club.

To make a long story short, the delay and buffer system built into the auction houses in WoW is already more "advanced" in preventing gaming of the system than the Dow's electronic trading system. And it probably took less effort.

It probably took _lots_ of effort to make the let's-find-out-what-the-other-guy's-limits-are-without-real-trades bit work.
Posted by: Thing From Snowy Mountain   2009-07-29 00:40  

#2  Uh, sorry but there will be no arrests. Back more than a few years ago, the SEC stopped enforcing the laws. Goldman-Sachs lets our government know when they can arrest someone. I wish I was joking.
Posted by: gromky   2009-07-29 00:37  

#1  I got to thinking after I posted...

BTW... the problem is akin to a game that has turns, pseudo turns or no turns.

Now put that (no turns) game on the internet and guy with the best "ping time or lag" wins - everybody else loses.

So if it is a net-play video game it dies an early death because NOBODY WANTS TO PLAY A VISIBLY RIGGED GAME!

Why can't the idiots that regulate the world's markets see this?

The regulators of markets should spend a long long time with the World of Warcraft (WoW) design team.
The could then be ready for the next hit down the pike after pseudo-turn fairness is dealt with. Perhaps something equivalent to the "Chinese Miners" in WoW.

OH - I forgot - In the NAME of FAIRNESS - WoW rules forbit BOTS and they design their destruction when uncovered.

Couldn't we say that GS's and others auto trading programs are BOTS? Shouldn't they be dis-allowed to protect the game/market? After all game makers have seen the need to do so - and you must admit the nobody is doing human pondering and analysis in a high speed market so the market has truly become a game of money like the track and not an investment venue. - high stakes rigged gambling.
Posted by: 3dc   2009-07-29 00:09  

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