Explain Like I'm Five

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ELI5: Why is high frequency trading allowed? (lemmy.ca)

submitted 2 months ago by [email protected] to c/[email protected]

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I don't see how it's a benefit to capitalism or companies or, well, anyone, really, to allow people to make thousands of trades a day for minute profits on each.

My gut feeling is that the stock market would not suffer, and less resources would be wasted, if trades and updates to stock prices were limited to, say, one batch per hour.

There are probably reasons the system is the way it is though.

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[–] [email protected] 12 points 2 months ago* (last edited 2 months ago) (1 children)

30 seconds? Some exchanges have to measure the cables to prevent customers from getting a microsecond advantage!

[–] [email protected] 2 points 2 months ago

A company ran a new fiber line under the goddamn Atlantic Ocean from London to New York so London traders could trade a fraction of a second faster.