> I don’t think I ever had to do two transactions in a minute.
If the network only clears once a minute, you need to wait at least a minute for each person ahead of you in line at the store. Alternatively, you need to be willing to pay more to cut them in line.
Wait, isn't the correct analogy for the stock market that there is an (almost) infinite amount of registers, but each of them can only clear a customer at the first second of each minute?
This is where the analogy certainly gets stretched. The network and the registers are really both the exchange here.
Equity trading only happens at a small number of venues (inclusive of OTC, dark pools, and internalizers probably not more than in the hundreds, potentially low thousands). These would be the registers. In order to buy a stock, either you choose to ‘cut the line’ by paying the price someone tells you they are willing to sell at, or you wait for someone to sell at the price you announce you’re willing to pay. These transactions are processed serially (albeit quickly) at the exchange.
Allowing trades only once a minute (or some other period) is akin to allowing the credit card network to clear once a minute. Trades cannot occur more frequently, so the ability to enter and exit positions on demand is diminished. Obviously someone who wants to trade immediately for one reason or another is harmed by having to wait. Additionally, everyone (even those not trading) is harmed by not having up to date valuations for the positions they hold.
