No, the broken trades did not eliminate the half billion dollars that Knight lost. Quite the reverse.
The broken trades were mostly "clearly erroneous" trades because they executed at wildly wrong prices.
Lots of traders did make money at Knight's expense. Such is the risk of trading.
This just isn't true.
HFT isn't speculation. And the current markets are highly efficient, meaning all information about an instument is very quickly included in it's price, largely because of HFT.
If this weren't true arbitrage would work, and largely it doesn't anymore.
That's a complete fabrication.
What you describe is called manipulation and is specifically illegal. The SEC and exchanges monitor for this kind of activity. Nobody would stay in business long doing that.
This is just plain false.
Suppose you know that AMD is going to rise 5c, and place an order at an exchange for the current best bid. The HFT market maker has less info, and trades with you at yiur given price. He takes at most 1c and you take 4c. This is the best you can do because of the spread, and the market maker may well end up losing in the deal, since he sold at the bottom.
What magic do you think the HFT company has?
What problem are you trying to solve?
An HFT company can make an extra fraction of a cent on a trade because they pay for bettet infrastructure?
This was true when phones were first introduced.
What do you think us worse about using modern computers and modern networks?
A stock's price is affected by many things.
A few simple examples:
Commodities - many (most?) companies either use them or are affected in some way.
Similar or related stocks - suppose something happens to AMD - the price of NVIDIA will be affected. Likewise if the cost of silicon changes.
Derivatives - options market makers have to constantly change their positions in underlying stocks. So trading in options affects stock prices.
Currencies - many companies have assets priced in other currencies. They may have competition in other countries. They may have suppliers in other countries.
Weather - some stocks are affected by the weather either directly or indirectly (e.g. via commodity prices)
Etc...
So the value of stocks changes on much smaller tinescales than you imagine. Forcing people to hold a stock that may decline in value makes them riskier. Additional risk translates into a higher cost to trading, which results ultimately to lower volumes, less liquidity and a damaged economy.
This kind of idea is a bad solution to a nonexistent problem.
Most of the scientific and critical thinkers that I know are more humble about current knowledge than thr religious people I've met.
Also, just because you can't explain some of your experiences scientifically doesn't necessarily mean that nobody can.
Your argument about speciation is merely your ignorance. Firstly, some closely related species do have an enormous spectrum, as you describe about dogs. It may be worth noting that some breeds of dogs could be classified as different species, since they cannot interbreed anymore. That's an aside. The main point is that your expectations are way off. When a populatiin lives together, they interbreed, and therefore exchange genes, and traits continue within the whole population. A branch occurs when a population is split, and the two populations can no longer interbreed. Then you should expect the populations to diverge, and this is exactly what happens. Note, this has actually been tested.
Normal and simple are very different things. Occams razor has nothing to do with normal or, indeed, other universes. The simplest explanation for what we perceive is that there is a reality that we can sense. Another explanation is only required if this one doesn't explain all the evidence.
Slashdot Mirror
No, the broken trades did not eliminate the half billion dollars that Knight lost. Quite the reverse. The broken trades were mostly "clearly erroneous" trades because they executed at wildly wrong prices. Lots of traders did make money at Knight's expense. Such is the risk of trading.
A rare moment of upvoted clarity. Slashdot used to be a place of rationality. Now it's dominated by loud ignorance.
This just isn't true. HFT isn't speculation. And the current markets are highly efficient, meaning all information about an instument is very quickly included in it's price, largely because of HFT. If this weren't true arbitrage would work, and largely it doesn't anymore.
This is absolutely correct.
HFT trades on exchanges, where that kind of preferential treatment cannot occur. More BS from the ignorant.
What damage has HFT caused? Be specific.
That's a complete fabrication. What you describe is called manipulation and is specifically illegal. The SEC and exchanges monitor for this kind of activity. Nobody would stay in business long doing that.
This is just plain false. Suppose you know that AMD is going to rise 5c, and place an order at an exchange for the current best bid. The HFT market maker has less info, and trades with you at yiur given price. He takes at most 1c and you take 4c. This is the best you can do because of the spread, and the market maker may well end up losing in the deal, since he sold at the bottom. What magic do you think the HFT company has?
In what way do you think HFT messed up the global economy? I bet you can't back that claim up.
What problem are you trying to solve? An HFT company can make an extra fraction of a cent on a trade because they pay for bettet infrastructure? This was true when phones were first introduced. What do you think us worse about using modern computers and modern networks?
A stock's price is affected by many things. A few simple examples: Commodities - many (most?) companies either use them or are affected in some way. Similar or related stocks - suppose something happens to AMD - the price of NVIDIA will be affected. Likewise if the cost of silicon changes. Derivatives - options market makers have to constantly change their positions in underlying stocks. So trading in options affects stock prices. Currencies - many companies have assets priced in other currencies. They may have competition in other countries. They may have suppliers in other countries. Weather - some stocks are affected by the weather either directly or indirectly (e.g. via commodity prices) Etc... So the value of stocks changes on much smaller tinescales than you imagine. Forcing people to hold a stock that may decline in value makes them riskier. Additional risk translates into a higher cost to trading, which results ultimately to lower volumes, less liquidity and a damaged economy. This kind of idea is a bad solution to a nonexistent problem.
Most of the scientific and critical thinkers that I know are more humble about current knowledge than thr religious people I've met. Also, just because you can't explain some of your experiences scientifically doesn't necessarily mean that nobody can.
#8 use of sophistry.
He's playing by the rules and playing to win. What's the problem?
He fixes the cable?
I am a fisherman. And I can confirm that I did, indeed, hook a 747 once. It got away.
A 14% productivity boost does not necessarily (or even likely) equate to a 14% reduction in starvation.
+1
It's at least disingenuous. Especially when most of B was due to C, D and E.
Supposing that happened to me. Hypothetically, of course. Is there a way to appeal?
Nicely put.
Your argument about speciation is merely your ignorance. Firstly, some closely related species do have an enormous spectrum, as you describe about dogs. It may be worth noting that some breeds of dogs could be classified as different species, since they cannot interbreed anymore. That's an aside. The main point is that your expectations are way off. When a populatiin lives together, they interbreed, and therefore exchange genes, and traits continue within the whole population. A branch occurs when a population is split, and the two populations can no longer interbreed. Then you should expect the populations to diverge, and this is exactly what happens. Note, this has actually been tested.
Nonsense. The only observations you have are your own. When someone tells you something, you're observing it.
An axiom isn't necessarily true. It's merely ASSUMED to be true for some purpose.
Normal and simple are very different things. Occams razor has nothing to do with normal or, indeed, other universes. The simplest explanation for what we perceive is that there is a reality that we can sense. Another explanation is only required if this one doesn't explain all the evidence.