this post was submitted on 31 Aug 2024
143 points (95.0% liked)

Explain Like I'm Five

14205 readers
31 users here now

Simplifying Complexity, One Answer at a Time!

Rules

  1. Be respectful and inclusive.
  2. No harassment, hate speech, or trolling.
  3. Engage in constructive discussions.
  4. Share relevant content.
  5. Follow guidelines and moderators' instructions.
  6. Use appropriate language and tone.
  7. Report violations.
  8. Foster a continuous learning environment.

founded 1 year ago
MODERATORS
sabbah@lemmy.world
AradFort@lemmy.world
rikudou@lemmings.world
Don_Dickle@lemmy.world
Rikudou_Sage@lemmy.world
143
ELI5: Why is high frequency trading allowed? (lemmy.ca)
submitted 2 months ago by Eiri@lemmy.ca to c/explainlikeimfive@lemmy.world
34 comments fedilink hide all child comments
 

I don't see how it's a benefit to capitalism or companies or, well, anyone, really, to allow people to make thousands of trades a day for minute profits on each.

My gut feeling is that the stock market would not suffer, and less resources would be wasted, if trades and updates to stock prices were limited to, say, one batch per hour.

There are probably reasons the system is the way it is though.

you are viewing a single comment's thread
view the rest of the comments
[–] Xeroxchasechase@lemmy.world 2 points 2 months ago

I know the theory. In essense, the stock market (I was told) should predict the performance, strenth or beneficiality of a corp, but I guess that's wrong.

Also, by this measure a tree in the forest is worth nothing, but a cut and tree, and the land that it leaves behind are worth a lot. Teachers, nurses and "non skilled" workers are worth almost nothing, but market brokers are worth a lot.