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What impact would have the Tobin tax in Europe?

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By JohnLast 4545 days ago


This is of course a highly controversial paper. Some big guys are scary that they would use their edge.

Whatever they will tell you SPEED is an edge.

And of course many forget what the market is. The market is its true role is to create information by balancing the supply and the demand.

The market is not the cow of the HFT and it has never been intended to be so. The market can exist only if all the market participants have the equality of chances.

Now thanks to the HFT guys and their algos the market is giving fake signals to the economy. And that is wrong. 

The original idea of the speculators is to favor and enhance the signals that the market is giving to the economy.

Please look at this analogy.

Imagine Christopher Colombus in his first trip to America.

He sees that  there is not enough food left during his trip in the Atlantic. What he would do? He would reduce the rations of his crew and by this way he would save some food.

The speculators are doing the same. When they see that an item is becoming rare, they buy it, when they buy it they make its price to increase. When the price is increasing they send an information to everybody to start to save and use not so much from this item.

That is what speculation is, and that is why HFT is not usefull because it creates structural risks that creates very high possibility of creating wrong information by the markets.

The HFT guys say that they are adding liquidity and they are the lubricant of the markets. This is a complete bullshit.

What about the High Frequency Spam?

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