How can you allow the trading companies to locate computers closer to exchanges and flash millions of bids to give an unfair advantage?... Even professionals are losing faith in some aspects of the system.
Sentiment: NEGATIVE
Some traders still think that a computer could not trade as well as they can.
In our industry, there are so many competing companies and games, and they have people constantly out spying on competition. For example, Valve in Seattle tries to keep their location a secret.
In software and many other online markets, even dominant firms face potential threats because of the low costs for competitors to enter those markets. Threats more easily emerge because of better or newer technologies leapfrogging older ones.
Trade on the Internet is becoming very widespread. The problem is our laws have not caught up with electronic commerce.
We built a market at IEX that does not sell certain types of technology advantages to high-frequency traders, and as a result, the high-frequency traders that didn't rely on buying those advantages trade on IEX.
I have very little respect for the integrity of the trading on the exchange in most stocks. And I have particular disdain for the fact that the SEC has failed to deal with high-frequency traders who are doing nothing more than taking advantage of inside information, a buy or a sell order, because of technology advantages.
Markets work when people can evaluate the prices and risks of different products, then pick the ones that work best for them. But when the terms of the deal are hidden, competition doesn't work. And customers aren't the only ones who are hurt.
Well, another market is being created now out of Internet technology.
Electronic communications networks match trades between investors directly, without using a market maker or specialist as an intermediary.
Being able to compete for consumers' attention and dollars over the preciousness of access is a thing of the past. Everyone is using the Internet to globally market a product.