Bill Lear writes:
How does high frequency differ from computerized trading? There are plenty of unknown companies (such as the company RGM Partners, Ltd., here in Austin, TX) who specialize in "high frequency" computerized trading quite successfully and who are looking to engage every liquid market on the planet. The remarks cited do not really tell us how computerized trading can be dangerous, and what "improper trades" really are. It's clear that unfair access is a problem, but that doesn't say how computer trading per se is bad.
====================================== Right. It's not the computerized trading which is at issue, but the extra access to market information which the exchanges sell to investment firms who set up their servers nearby. Chuck Schumer complained to SEC chairperson Mary Shapiro in July that "for a fee, the exchange will 'flash' information about buy and sell orders for just a few fractions of a second before the information is made publicly available. These traders, using super-fast computers, can then act on that early information to trade ahead of the pending orders." The SEC has since proposed banning the practice. Apparently, a SEC rule requires that a full second elapse before the exchanges can make trades public. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
