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Australia May 'Pause' Trades To Tackle High-Frequency Trading
angry tapir (1463043) writes "The Australian Securities and Investment Commission (ASIC), a government financial watchdog, is reportedly contemplating the idea of implementing a 500 millisecond delay on trades in an effort to put the brakes on high-frequency trading. ASIC last year knocked back the idea and stated that fears about HFT were overblown. However, in a government inquiry today representatives of the organization said the idea of a 'pause' is still on the table."
There's a gripping article over at the NY Times (adapted from a just released book) that explains very well the pitfalls of HFT, where the problems are mostly due to the haves and have-nots, just like in most things. The article is at http://www.nytimes.com/2014/04...
Not having a level playing deck in an exchange is a major problem for the correct functioning of said exchange.
What really annoy me with HFT, besides not being "fair", it that it as a cost and that the society doesn't benefit from it.
Building a stock exchange with top-notch computers if fine, since there is a need fulfilled here for our society.
But building new warehouses as close as possible to stock exchange computers to house top speed fiber connected computers, just to lower the delays from 600ms down to 10ms or so, to allow HFT, is a waste of resources.
No one needs that, it's just a smart way to build a sucking vampire over information systems. And this cost is always somehow reflected to society.
One big bank of my country paid a lot to move all its crucial infrastructure abroad, in such new buildings, to be able to compete in HFT.
Who's paying for those efforts? The company, the bank, instead of doing something more useful to society (investments to improve their services, etc).
It's front-running by machine. If a person-trader did this, they'd be in jail.
"... the illegal practice of a stockbroker executing orders on a security for its own account while taking advantage of advance knowledge of pending orders from its customers."
Finally had enough. Come see us over at https://soylentnews.org/