The speed increase of stock trading from microseconds to nanoseconds leads to an increase in order cancellations and is otherwise of little value to investors and the general public, a study from University of Illinois has found.
Researchers call these stock exchanges a “zero-sum game” where legitimate traders are essentially subsidising high-frequency traders who cancel orders, reflecting a wealth transfer from low-frequency to high-frequency traders.
Where the majority of trading data were cancellations, it was found that cancelled trades were taking over the system and monopolising resources.
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watermelonpunch
logged in via Twitter
I finally appreciate the old Star Trek episode, "The Gamesters of Triskelion".
Iain Wicking
Director
The whole system is a giant casino and 'skimming' exercise fixed favour of the major banks. This is just another example of market manipulation. I don't think it is even worth calling it a market any more. If I were a retail investor I would not even bother. I note that retail investors are withdrawing billions from Wall Street.
The financial system will collapse at some point given that the banks are still behaving in the same manner that they were prior to 2008. In fact exposure to derivatives loss is growing and a daily basis - they are assuming that the dollar will not collapse and that 'QE' will continue unabated and they can continue to create stock, currency and commodity 'bubbles'.