[151606] in North American Network Operators' Group
Re: $1.5 billion: The cost of cutting London-Tokyo latency by 60ms
daemon@ATHENA.MIT.EDU (Rodrick Brown)
Mon Mar 26 14:20:01 2012
From: Rodrick Brown <rodrick.brown@gmail.com>
In-Reply-To: <129926.1332768738@turing-police.cc.vt.edu>
Date: Mon, 26 Mar 2012 10:34:42 -0400
To: "Valdis.Kletnieks@vt.edu" <Valdis.Kletnieks@vt.edu>
Cc: NANOG list <nanog@nanog.org>
Errors-To: nanog-bounces+nanog.discuss=bloom-picayune.mit.edu@nanog.org
On Mar 26, 2012, at 9:32 AM, Valdis.Kletnieks@vt.edu wrote:
> On Mon, 26 Mar 2012 08:59:34 -0400, Rodrick Brown said:
>> HIgh frequency trading does provide a service to the financial markets as=
a
>> whole despite what the media and government politicians will have you thi=
nk.
>=20
> OK, I'll bite. What benefit does the market *as a whole* get from the abil=
ity
> to do trades in 60ms rather than 120ms? (Hint - the fact you can extract
> money via more arbitrage transactions per minute is a benefit to the trade=
r,
> not the market as a whole - if you extract $100M from the market, it came
> from somewhere....)
In its core very liquid markets and market efficiency.=20
The faster a trade executes is the faster the market can recover and self co=
rrect themselves from trading mishaps.=20
Faster speeds has provided higher volume of shares traded which has directly=
lead to higher profits, higher tax income for governments, and the less lik=
ely-hood of being front-run by dishonest brokers and most of all lower trans=
action cost for the average market precipitant.=20
HFT like anything else in the modern world is prime for abuse for anyone loo=
king to manipulate the markets by taking advantage of certain rules or looph=
oles that legislation has not yet discovered or plugged. That being said I s=
trongly believe high speed trading has done more good than bad for the finan=
cial markets as a whole.=20
Lowering access time to the markets will only open up a new can of worms whi=
ch will easily be circumvented by other loopholes and abused by those with t=
he know how!=20
Sorry for the off topic rant!=20=
