When open outcry is gone, everything is gone.
There is no more price discovery, no more working together, and no more deciphering who needs and who wants. All of what you see is a computer screen, with no openness whatsoever.
Your retirement and almost all of your investments are matched by a computer within milliseconds; nobody even knows what’s happening anymore. When the quants took over, everyone shifted to the screen, whether they liked it or not.
Dark pools are even worse. Most of the time, you don’t even know what your trade is until after it’s made. This is extremely dangerous because it’s difficult to tell which way the market is moving.
This isn’t just with equity. It’s with commodities, financial instruments, bonds, indexes, and so on. This is extremely dangerous and these flash crashes are going to keep happening unless they reopen the trading pits.
Imagine you have a football game that you’re watching on HDTV at all camera angles. You know what’s happening, you see the players, you see the coaches making plays, and you see exactly how the game is being played.
Now imagine that to make things easier, all of the TV stations now decide to only just film the scoreboard, since that’s what “really matters”. That’s electronic trading, and it has completely screwed over everyone.
Everyone is trying to “limit risk” by having the robots do it for them. You need a human presence to keep everything well regulated and fair, and humans can easily make good financial decisions based on the football game, not the scoreboard. Yet you don’t have that anymore, which is sad. When everyone is trying to “limit risk”, then nobody is risking. You need risk to keep the markets good, but you still don’t have that anymore. Now it’s just how fast your computers are that determines how successful you are on Wall Street. This has plagued the markets time and time again, since the robots are the ones making the decisions.
Submitted February 08, 2018 at 07:29AM by PrideAndPolitics http://ift.tt/2BgVkA8
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