"Naslund, Steve" <SNaslund () medline com> wrote: > It seems to me that all the markets have been doing this the wrong way. > Would it now be more fair to use some kind of signed timestamp and > process all transactions in the order that they originated? Perhaps > each trade could have a signed GPS tag with the absolute time on it. It > would keep everyone's trades in order no matter how latent their > connection to the market was. All you would have to do is introduce a > couple of seconds delay to account for the longest circuit and then take > them in order. They could certainly use less expensive connections and > ensure that international traders get a fair shake.
I can't see any incentive for any *influential* party involved (the big firms or the exchanges) to make the process "fair". The exchange gets more money for low-latency network access and expensive co-location. The moneyed firms with HFT capability of course do not want anyone else to have their advantage. Even governments don't want long-distance traders to have "fair" access, as that reduces the advantage of local tax-paying firms, thereby reducing tax revenue, jobs, etc. HFT is not just a US phenomenon; all major exchanges have basically the same sort of phenomenon. So UK-based trading firms with HFT setups very close to the FTSE exchanges have advantage over US-based firms that don't have HFT setups in London. -- RPM
