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It's important to make money but,how much you're paid for your work is an exceptionally bad way to measure that work's value in our society.

Tim O'Reilly said "Create more value than you capture." I would argue that hft is the definition of people capturing value that they didn't create.




Firstly, this article has nothing to do with HFT. Goldman is executing on behalf of clients who are not HFT

Secondly, your statement makes an implicit assumption that there is no value in providing liquidity to capital markets. This assumption is false. Think of your local grocery store. Sure, you could drive down to the distribution center and buy stuff there. But instead you go to the store where it’s conveniently laid out for you. Same with HFT. If it didn’t exist, you would still be able to buy and sell but markets would be a lot less liquid and buying and selling less convenient.


An article titled "GS spending millions to shave millisecconds off stock trades" has nothing to do with HFT?

It isn't at all clear to me buying and selling at an auction even only once a day, let alone once a minute or second would make financial market end user worse off.

Grocery logistics is a terrible analogy for financial markets.


The "F" in in "HFT" stands for "Frequency". This is a separate concept from latency. GS are spending money so they can execute their clients' orders on the market faster, to reduce the risk of the price shifting between order and execution.

> It isn't at all clear to me buying and selling at an auction even only once a day, let alone once a minute or second would make financial market end user worse off.

Go look at the history. Back before the 80s, trading was done by hand, sub-second anything was impossible. Guess what! Spreads were enormous, and the cost of doing business was huge. As a financial market end user (I have a pension), I want the smallest spreads possible.


GS is spending the money on this project to reduce high frequency traders ability to capture some of the value of their trades on behalf of clients. Why do you think the price moves away from them? It isn't random. It has everything to do with hft, which has everything to do with market structure.

I'm highly familiar with the history, no one is advocating for a return to open outcry.

Your pension is almost certainly a GS client and footing the bill for this project through execution costs. A periodic auction model would make latency much less of a problem and society's time and energy could be put into solving real problems.




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