Make $377,000 trading Apple in one day
- Thread starter OnClose
- Start date
"The authors suggest that the perpetual motion tape be replaced by a stop-motion tape. Instead of a continuous, free-for-all market, the session would take the form of a series of lightning-fast-auctions at intervals of a few milliseconds. This would give exchanges a reasonable amount of time to disseminate information (most only take a few thousandths of a second to catch up on the "direct access" feeds). It would also give traders a reasonable amount of time to place bids and offers on a given stock. The average investor would not see the difference because prices on active stocks would still be changing many times per second."
(Almost) everyone would benefit from this. But lobby money does what it does.
(Almost) everyone would benefit from this. But lobby money does what it does.
That article is essentially correct, but it is missing at least half the battle. Just because a market is inverted is no guarantee of profit. Getting the inversion takes engineering smarts. Taking advantage of it takes mathematics and trading smarts.
The solution is simply to have all participant have to get their quotes from SIP, no more direct feeds. Everyone gets an aggregated feed. Also no direct routing unless you are a market maker. All orders otherwise have to be submitted to the SIP. Now there is incentive to have to make markets.
If this happens, sell short equinix into oblivion. Although you could collocate and get the sip faster, it would blend the edge and make the barrier to entry far less costly. The way to remove the problem is not with endless rules, but by making competition possible to far more firms to the point it is no longer worth it.
Extracting billions of dollars from a 15T market is a tiny tiny fraction of friction. People don't mind profiteers and opportunists if they were creating or providing a service. The problem is that trading is purely a game played for its own sake like chess. It probably has no real economic value. Once you start down this rabbit hole, what value does anything have? What is the value of gold? Why does a CEO make more $ than someone who risks her life to defend a country? It's all a game played by fools.
end co location. It's a giant scam
