On Thu, 13 Aug 2009, Steve Witham wrote:
The question boils down to whether the rules under which trading occurs are fair. If so, behavior that makes profit for the trader is also doing the market as a whole a service.
Do you mean fair to the privileged class of high-speed traders, or fair to the market as a whole? If it's the latter, then the claim is rather tautological. If it's the former, then why does "profitable for high-speed traders" imply "good for the market as a whole"? ...
The question of fairness vs. gaming is not about whether any Joe off the street, or a member of just any species on the planet, no matter how slow its clock cycle, has an equal chance of making a fulfilling living as a trader. Those of us in the rest of the economy should not be trying to insure that old firms, business models, individuals, species, algorithms and chip generations are protected against upstarts or startups.
I agree about that, however I'm not sure why we should necessarily allow traders to implement schemes that let them make trades orders of magnitude faster than everybody else.