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High-Speed Traders Rip Investors Off, Michael Lewis Says

36 点作者 pierrealexandre大约 11 年前

12 条评论

kasey_junk大约 11 年前
Analogies with stores&#x2F;checkers&#x2F;soda etc. are all flawed because they are based on something that does not exist in the markets, that is a fixed price. When you buy a physical good in a store they have a published price that you can trust to be what you will pay (in western countries that is the norm, not so in many other places.)<p>Conversely, when talking about equities markets there is no such thing as the stock &quot;price&quot;. This is a short hand that is used. In reality, there are groups of people, some willing to buy shares at a variety of prices, and some willing to sell shares at a variety of prices. The job of the exchange is to match these 2 groups when the buy&#x2F;sell prices intersect or cross. This gets complicated when there is more quantity on 1 side of the buy&#x2F;sell than the other. Exchanges have rules how this imbalance will get resolved, most of the time it is based on who has been at that price point the longest.
unreal37大约 11 年前
The argument in favor of HFT is that it both increases liquidity of markets and reduces the spread - both favorable to most investors.<p>But they can actually see you attempting to buy stock, step in front of you, buy it before you, and then try to resell it to you for a higher price? That&#x27;s bad behavior and reduces confidence in the free market. There needs to be regulation around things like that.
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badman_ting大约 11 年前
I work for a financial services company and I still don&#x27;t invest in stocks. Not that high-freq trading is specifically the problem (maybe it is, maybe it isn&#x27;t, I dunno) -- retail investing just seems like a sucker&#x27;s game, though admittedly that leaves me a little stumped as to how a schmuck like me is supposed to grow his money.
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keithwarren大约 11 年前
I don&#x27;t like taxes in general but wouldn&#x27;t a small tax per share (pennies even) pretty much end HFT?
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fauigerzigerk大约 11 年前
Can someone help me understand this beyond analogies please?<p>If I submit a buy order for 10 shares of GOOG with a limit of $1134 that order is going to show up in the data stream of HFTs only after it has become a valid open order on the exchange, right?<p>If at that time there is a sufficient volume of open sell orders at or below my limit, does my order go through or is there a way for an HFT to overtake my order?<p>The only way I can see how an HFT could possibly overtake my order is by offering to buy at a higher price than me before my order goes through, hoping that he could sell the shares to me later on for an even higher price.<p>But that&#x27;s a pretty risky bet for the HFT assuming he needs to be out of the market before the market closes. It seems to me that the most likely victims are other HFTs because they are the ones who will quickly raise their limits when they see the price go up.<p>A low frequency trader like myself can just sit there and wait until the price comes down again or just walk away. Is there something I misunderstand?<p>[Edit]:<p>So, summing up the replies I got here, the only problem seems to be that my broker is allowed to send my order to HFTs before it goes live on the exchange. Wouldn&#x27;t it be incredibly simple to ban this practice? If it&#x27;s that simple to solve, why all the fuss about HFT?
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001sky大约 11 年前
The original# piece somehow made it through the cracks at HN.<p><a href="https://news.ycombinator.com/item?id=7500426" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=7500426</a><p>6 points by dcaisen 4 hours ago | flag | discuss [no comments]<p>__________<p># By Michael Lewis, published in the NYT today
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skybrian大约 11 年前
It seems like the problem is executing a trade when the first buyer (or seller) comes along to take the other side of the trade, rather than waiting a bit to see if someone else will give you an even better price. That is, trades shouldn&#x27;t execute immediately when prices cross. Instead it should start an auction.<p>If you&#x27;re more interested in getting out a few milliseconds sooner than in getting a better price then the front-runner is doing you a service. Otherwise, it seems like the time needed to run a brief auction would be well-spent.
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foobarqux大约 11 年前
Can anyone explain how IEX is supposed to be a better exchange?
notastartup大约 11 年前
I thought free market meant equal playing field for all.<p>From what I read, HFT is limited to people with large amount of money both to start and put their money in.<p>I think 30 years ago, HFT traders would&#x27;ve spent jail time.
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skywhopper大约 11 年前
My understanding of high speed trading is that this has always been the point. I have to assume there&#x27;s so much money in it that the obvious move to outlaw it as soon as it was devised was already pre-paid off.
rayiner大约 11 年前
Its like saying computerized grocery checkout machines rip off cashiers.
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dsjoerg大约 11 年前
It&#x27;s like saying Wal-Mart rips off its customers, because they use computers and their market power to buy stuff cheaply, and then they turn right around and sell it to their customers for more, making a profit 100% of the time.
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