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| ▲ | loeg 4 hours ago | parent | next [-] |
| > it's certainly zero sum over the millisecond-term. Why do you think market-making is zero sum? Providing liquidity has value and market makers are compensated for that. (Milliseconds of liquidity being appropriately compensated with fractions of pennies.) |
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| ▲ | Retric 2 hours ago | parent [-] | | > milliseconds of liquidity Speed of light delays. Due to the underlying physics of the universe there’s physical limitations on how much liquidity can matter on sufficiently small timescale. |
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| ▲ | Anon1096 18 hours ago | parent | prev [-] |
| The millisecond-term zero sum game is part of what allows for a positive sum long term. For example, zero fee trading was pioneered by Robinhood and only possible because of payment for order flow, and as a result it's virtually unheard of now for retail to be paying per transaction. Now more retail investors can participate and everyone benefits. You can also point to lower spreads and faster execution as direct benefits. |
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| ▲ | Retric 8 hours ago | parent | next [-] | | > zero fee trading Such wonderful marketing terminology. That’s not actually free, the cost of trading with less information is quite high. | |
| ▲ | ralph84 17 hours ago | parent | prev [-] | | Or you could just hold auctions a few times per day and eliminate the billions of dollars spent trying to win a pointless race. | | |
| ▲ | loeg 16 hours ago | parent | next [-] | | No one wants four-trades-a-day settlement to save 0.00001% or whatever in trading fees. | | |
| ▲ | ralph84 6 hours ago | parent | next [-] | | No one? Mutual funds have managed to attract $33 trillion trading once a day. The demand for millisecond-level trading is almost entirely from a very small group of firms profiting from it. | | |
| ▲ | loeg 4 hours ago | parent [-] | | And they are steadily losing new investment dollars to ETFs, which trade interday. I don't think interday trading is why ETFs are more attractive to all or most investors, but a 0.000001% (or whatever) cost advantage just falls below the noise floor. It isn't worth any other tradeoff. |
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| ▲ | amenhotep 14 hours ago | parent | prev [-] | | That's true, we don't want it to do that, we want it to kill these parasitic entities. Much like one doesn't swat a mosquito because one will truly miss the amount of blood she's taking. |
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| ▲ | naveen99 11 hours ago | parent | prev [-] | | Then the real trading will just move to hyper liquid or another platform that allows trading in real time. |
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