Stock Market Manipulation By Millisecond Trading

cfa22 writes "Nice piece in the NY Times today on ultra-fast trading on the NYSE and other markets. The 'algos' that make autonomous trading decisions have to be fast, but I wonder: Is network speed ever a bottleneck? Can anyone with inside experience with millisecond trading provide some details for the curious among us regarding hardware architectures and networking used for such trading systems?" According to the article, high-frequency traders generated about $21 billion in profits last year.

Comments

the follow up thought

[circletimessquare]

is that a free market requires regulators. which seems like a contradiction, but only if your ideology is shallow

its a classic failure of libertarian and other anti-government ideologies to posit that things get more fair when you get rid of governmental intrusion. you need government in this world to keep things fair. of course bureaucracy and official corruption ruin plenty of things. its just that, without the government, things are far worse

certain large players abuse the system to their benefit. this ALWAYS happens. the whole notion of a free exchange of equals is pure fantasy. without an intrusive governmental system in place to actually keep things equal, things get very unequal very quick

the one good thing about the financial meltdown of 2008-9 is it puts a stake in the heart of the reagan era idea that the smaller the government the better. not that plenty of things about big government doesn't also suck. the truth of course is the government must maintain a certain presence and size, not to small or too large. but the idea that smaller is always better has been proven to be a failed ideology

you're forgetting the part

[circletimessquare]

where investing in the arms race requires significant cost, and therefore favors large entrenched interests at the expense of smaller traders

in what alien universe is that "leveling the playing field"?