6 ms·
I've also wondered the same thing. I've always been replied to with "it provides liquidity to the market" but I still don't see why anybody needs microsecond le
by TTPrograms 11y ago
I've also wondered the same thing. I've always been replied to with "it provides liquidity to the market" but I still don't see why anybody needs microsecond level liquidity. Seems like it provides marginal benefit over a minute or hourly quantized exchange at tremendous cost (to society).
- wdewind 11y agoTLDR: Compounding effects that add up over time, and extremely dubious use of the words "tremendous cost (to society)."
- lberger 11y agoHFT is a tax on the markets (and by extension society).
- wdewind 11y agoI mean...that's kind of a hugely controversial point to just say as a fact. It also completely ignores the fact that HFTs employ a lot of different strategies, some of which are uncontroversially beneficial to the market (market making).
- auntienomen 11y agoOrdinary traders obviously don't need microsecond level liquidity. But having microsecond level liquidity allows more market makers to compete with each other to provide liquidity. This competition lowers the prices ordinary traders pay for liquidity.