Re:Insights into High Frequency Trading from the Virtu IPO [...
by ultraluminous on Thursday May 04, 2017 @09:03PM
(#14270362)
But he didn't argue we have "too much" liquidity. The argument is that we have "enough" liquidity and are now expending a huge volume of capital on a literally imperceptible increase in liquidity.
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Re:Insights into High Frequency Trading from the Virtu IPO [...
by consz on Thursday May 04, 2017 @10:29PM
(#14270700)
My point is that I don't think it's a huge volume of capital. The extra wasted capital here is the cost of running an HFT firm while you test your strategy (aka. see if your liquidity is valuable or not) -- if it's not profitable, it's not a huge loss (HFT firms, in the grand scheme of things, are relatively small) and the firm shuts down; if it's profitable, then clearly they're trading against non-HFTs that value their liquidity, so what's the issue here?