Quote from Random.Capital:
Yes. It's very unfair that those with a strong interest and ability to play the game should have any sort of advantage. This logic should be extended all the way - nobody should be allowed to trade based on real time quotes. All trades should be MOO orders for the following day so that everybody has access to the same after-market data.
Anything less is grossly unfair.
Not at all. Again I may not be explaining myself well.
All I am suggesting is that the matching engine be in a location neutral place where geography advantages are reduced. For example, in Chicago, it is nearly impossble to get a cage at 355 Cermak, where most people need to be to get very good access to the GLOBEX engine. If you moved the egine to say Schamburg, or somewhere with plenty of space, the price of colocation would go down because land is cheap. If you need more space, no problem, just build another football sized facility 100 feet away. It won't cost much and the land is plenty.
Look, people with a
locked in edge don't want to give it away. Let me give you a simple example, and there are many as markets went from pit to screens.
The CBOE has a product that instutitions love, the SPX options pit. The exchange would love to try to move this pit to be screen traded as opposed to be pit traded. After all, it is 2009!!! It would generate that much more revenue for them. Every time a vote comes to see if the members want to move this pit to more hybrid or gawd forbid fully electronic, it gets voted down by the members. Why kill your golden goose? There is no room in that pit anymore for people that want to risk their good money trading it, and anything bigger and you are risking being in the bleachers at Wrigley Field.
I don't want to do away with progress. On the contrary. I want to make progress an equal opportunity whether you are Goldman Sachs, or some five man firm. Let's duel in the market on trading ideas, not on how close you can be to a matching engine. Or at least allow as many new entrants to compete in this ultra-HFT space by removing distance as an obstacle for as many as possible, not as many as politically possible.
Technology is supposed to be the great equalizer. Show me the money.
