ctlby

Speed wins regardless of the number of exchanges. Even with a single venue, the first participant to execute a trade captures the embedded value and removes that opportunity for all other players. As a corollary, in any given market, only one or two firms can successfully run such latency-arb strategies. Most HFT strategies do not do this.

> HFT mocks the true essence of trading

HFT is the true essence of trading--predicting short-term changes in supply and demand and acting accordingly.

> This used to give us a real picture of the public sentiment for those companies or commodities.

Can you pinpoint some moment when it stopped?

> Stocks are bought and sold in micro seconds

Most HFT strategies don't actually do this. Buying and selling in such a short period implies a pure arbitrage, of which there are very few. The ones that do exist are generally fully exploited by the single fastest participant.

> creating an unsustainable and unlevel playing field for the real humans in markets.

Depends on your investment horizon. The statement is nonsense for all but the shortest timeframes. In particular, the fundamental finance guys (the "investors") are in no danger from the machines.

> The current ecosystem is just unsustainable.

Why? Automated market-makers are a middle-man that temporally bridge supply and demand between "real" buyers and sellers. Kind of like a grocery store temporally bridges supply and demand between consumers and farmers. Kind of like a car dealer temporally bridges supply and demand between consumers and manufacturers. Kind of like... you get the idea. Why are equity markets different?

The persistence of this myth is truly remarkable. Consider that Veblen published "The Theory of the Leisure Class" in 1899. What we consider today the middle class was very much alive and booming by the end of the 19th century.

Well said. Crude majoritarian morality has hole after hole that even its most thoughtful adherents can do nothing to defend. Why people continue to invoke it is beyond me.

> Which means you have to accept nominal tax rates of 48%+.

Nonsense. I won't speak for Germany, but our government spends about $500 billion annually on things that can plausibly be called public goods (I exclude defense). This is a mere 4% of total US personal income.

Sorry if this is just oversight, but I haven't seen much discussion on HN of liability arising from termination of an employee. I'd guess (admittedly, no data here) that this is one of the major factors driving disemployment for marginal tech candidates (read: those whose qualifications are in doubt). Hiring someone you may soon need to fire is difficult enough, but probably not a dealbreaker. However, pair that with legal risk, especially arising from discrimination suits, and the expected value of your candidate turns deeply negative.

> you'd see salaries rising

Residents of the Bay Area looking for housing would beg to differ.

The basic argument is superficially appealing, but it's far from clear that it's true. Critiques of failing institutions have more force when there exists a credible threat to walk away. See e.g. "Exit, Voice, and Loyalty"

Why is this relevant? The proximate cause for the decreasing life expectancy is massive alcohol consumption. You could assign the blame by drawing long, tenuous chains of social causation from policies you don't like. Or, not unreasonably, you could just fault those destroying their bodies through substance abuse.

Has any philosophy in human history caused more death and suffering than collectivism and its offshoots? ... and its adherents take the free-marketeers to task for their "cruelty" and "heartlessness"!

> Laws aren't about morals, they're about reason.

Most contentious issues--marriage laws, universal healthcare, minimum wage, etc--are explicitly framed and argued (by both sides) with the language of justice. Moral preferences guide law; reason is just post-hoc rationalization.

You might object that "law" is not the same as "contentious issues," but that changes nothing. The emotionally charged political process that drives these debates is the same one that produces legislation. It is almost structurally incapable of producing rational outcomes.

> Our status as a social species that works better when it works together and looks out for other members of the group.

Fair. But why define the relevant group as your countrymen? If you do not believe in positive obligations towards strangers, that definition is overly expansive. If you do believe in such obligations, it's overly restrictive-- third world residents are much poorer and are surely more deserving of your help than anyone inside the UK.

> We have a much healthier and more productive society when we aren't entirely focused on material self-interest and and irrational fear of strangers or 'welfare scroungers'.

There's a large space of actions between fearing strangers and showering them with handouts.

> A free, universal healthcare system should be a primary goal of any civilised society.

What premises lead you to conclude that our highest duty is to guarantee our fellow citizens the unlimited attentions of doctors, surgeons, nurses, chemists, biotechnologists, etc? Keeping in mind, of course, that fellow citizens = collection of complete strangers circumscribed by some invisible line in the dirt.

> The fact that we had one and it has been eroded by decades of corporate self-interest and Tory backhanding is abhorrent.

Surely that's not the only thing standing between society and your goals for it. I might start with the fact that voters have resisted paying for the things you'd like them to pay for.

They don't believe it will solve "our" problems. They dispute the very premise that they're "ours" to begin with--your healthcare is your problem, no one else's.

I laughed when I read this, but there is indeed a difference. Here, a meaningful portion of your confiscated earnings is distributed to your fellow citizens. Moreover, the means of confiscation is predictable, as is the degree. In Russia, you'll get fleeced just the same. However, your money will primarily line the pockets of those doing the taking.

A handful of conversations and a couple months of travel will not give a Westerner an understanding of Russia. The vast majority USSR emigrants under a certain age (that is, people truly familiar with both systems) would disagree with you in the strongest possible terms. I'm one of them. There is no moral equivalence.

The second page contains a succinct summary of theoretical reasons why this is true. The rest of the paper goes over empirical findings: http://www.acsu.buffalo.edu/~keechung/MGF743/Readings/G2%20D...

Since then, we have additional data points from the decimalized US equity markets. See http://www.sec.gov/rules/other/2014/34-72460.pdf for a bibliography. The weight of the evidence points towards thinner books. Incidentally, the SEC is looking to increase the tick size for illiquid small-cap stocks for this very reason.

A more granular tick doesn't just "spread out" the existing liquidity to a bunch of price levels--it meaningfully decreases incentives to post serious size. The spread will end up being marginally tighter, but with thinner books, you still pay more to trade large amounts. The objective function to minimize is transaction costs, not spread.

It's not a tax, it's the price of immediacy. You can either work your orders yourself (which doesn't in the least require speed), or you can pay a concession. It has always been this way and always will. HFT has made that concession the lowest it has ever been for the vast majority of market participants.

Eliminating the sub-penny rule would probably be counter-productive for most US equities. You would not see further spread compression (most stocks' natural spreads are already greater than one cent), and displayed size would likely shrink (this latter bit is exactly what happened when prices decimalized). A better alternative would be a tick-size schedule that's a function of price, as is generally done in Japan and Europe.

Not at all true. They almost exclusively hire from academia.

You can believe that the government should provision military defense and still find laughable the claim that one "deserves" a sophisticated fighter jet flying overhead.

Drugs are a complex good created through the intensive efforts of highly intelligent, trained human beings. They are anything but a natural right.