Slowing down the predatory high speed traders - BBC Newsnight

I saw this on the news last week and thought it was such an interesting report it was well worth a share. Amazing they got permission to film inside the data centre!

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Fun article that's almost related:

The irony that hits from this video is that since information input and output is delayed around 1s total it is not "predatory" high frequency trading but an "investment".

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Lol - they're claiming the delay causes "unfair access at the market?" In other words they'd like to keep the stutus quo and ensure that when some cash cow comes along to purchase some stocks to help the average person retire they can continue to latch on like a tick to suck some money out of the pool without contributing - based on a speed advantage!?!

What do the high speed traders even do to for the market? Sounds like they're a racket to me. You're a mutual fund and want to buy stock? Gotta pay the high speed trader tax, first.

Whatta buncha jagoffs.

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Pretty much hit the nail squarely on the head there. I imagine this new approach would also help reduce the chances of flash-crashes where traders using algorithms to buy/sell stock rapidly occasionally get it wrong and can inexplicably wipe billions off the markets.

So I'm still puzzled by this whole thing. I try to be a fair person and consider all sides of something - so I've done some thinking and I cannot for the life of me figure out how this is in anyway beneficial to our market economy.

So I tried an analogy for this. So your at the market and there's a fruit stand selling pineapples. So you get in line and when it's your turn, you say I'd like to buy 3 pineapples. At that same moment somebody cuts in line, buys all the pineapple and and then turn around and says, "Oh, you would like to buy 3 pineapples? I now own them all now..." and then charges you a slightly higher price.

Really, it seems like they're professional line cutters essentially, to me.

Please someone explain to me like I'm a 3 year old why this is helpful? Or, at least explain how it's any different than my analogy? I'm actually trying to see the justification for this.

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I'm in the same boat as you, unless I'm misunderstanding. They're just another middleman that skims off the top of real people's investments and hard work.

I know it's anecdotal, but 5 or so years ago, my wife, before we were married, put $5k in some kind of investment account at a local bank. They lost it all. Not a penny left. It wouldn't surprise me if the local guy got worked by the bots.

the queue jumper at the market stall is the perfect analogy. I liked the fact that the firm in the news clip had a speedbump which was simply a cabinet full of coiled up cable to stop the traders in a pissing contest over their physical distance from the cabinet. High frequency trading, flash crashes, micro trading, I like to think of a brighter future where people look back at this point in our history and, for a lot of reasons, facepalm.....

Ok - so at least someone else can see my analogy is fair. So I don't feel out of line in my perception.

However, it may still be benifiical to society and I'm either too crass or stupid to see it.

Like for example - the line cutter may cut in line clean the pineapple and cut it for you (possibly adding an unwanted service cost to the pineapples but hey it's at least a service added fee and not a sort of "man in the middle attack" on your fruit salad)

Could anybody please explain how this practice is helpful to the market? Honestly, I'm trying to figure out how to justify it.

I honestly don't think it's helpful to the market, its just a way of using tech to make more money. I say more money rather than simply money because you need a lot of dough in the first place. I think it's £1m per annum rent in the exchanges to get close enough to the cabinet to use this particular strategy. "man in the middle attack on fruit salad" 😂