Insights into High Frequency Trading from the Virtu IPO [pdf]

Re:Insights into High Frequency Trading from the Virtu IPO [... by lobster_johnson on Thursday May 04, 2017 @05:44PM (#14269143)

Because the stock exchanges are private companies that profit from every trade. It's in their interest to keep making everyone trade as much as possible. I doubt anything is going to happen unless all exchanges agree to institute the same policy, or a law is passed to that effect.

I don't know why you're being downvoted. It's a legitimate concern.

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Re:Insights into High Frequency Trading from the Virtu IPO [... by jasonmunro on Thursday May 04, 2017 @06:10PM (#14269310)

While it's true that stock exchange operators are private companies, they are also SROs that undergo significant scrutiny from various government organizations (FINRA, SEC, etc).

Most (all?) exchanges use "maker/taker" pricing, so while it is possible the trading platform might not make money on _every_ trade depending on the exact pricing rules, they do make money in the aggregate, and in general more trades equal more profits. Many of the opponents to HFT believe that the maker/taker pricing model is a big problem in the markets, and doing away with it would significantly curb HFT profits. Personally, I'm ambivalent about HFT. All stock trading seems to me far removed from the actual value of the underlying companies anyway :).

Disclaimer: I was an engineer at BATS Global Markets for 5 years, but have been out of finance for the last 4, so my info may be out of date.

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Re:Insights into High Frequency Trading from the Virtu IPO [... by Kenji on Friday May 05, 2017 @02:29AM (#14271508)

Idk why I'm being downvoted either. I bet in 2 years there will be a blog post which refines the idea I outlined above and it will be on top of HN and everyone will agree with it. That's how HN works.

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