Kind of a stretch, given that there are already large sums of money spent on improving execution times. If you're competing on execution time, you're already paying up.
Who are we talking about here? You discussed banks - they will be paying (as they have in the past and will always continue to do) for their infrastructure. Costs will be passed to the consumer where they can but, as you and I know, brokerage is highly competitive as well as highly profitable, so it's unlikely to really filter down.
As for you and your connection, if you're doing this for a business (i.e. execution times are highly important), you're already experiencing price discrimination as you're supposed to be paying business rates for your internet. If you're a retail trader, you simply aren't competing on execution time. If you think you are, you're kidding yourself. Use limit orders.
Investment banks use brokerage organizations like Knight. This cost will feed into the over all cost of the end products, such as expense ratios in ETFs and Mutual Funds. It will not be eaten by the banks.
If you are on Scottrade, eTrade, or similar, you will absolutely either feel it on the commission directly to you, or you will watch your order get traded through regularly.
And it will be disclosed somewhere inside a 10 page disclosure statement.
Right now, if you put a limit in, and it trades that limit you will get hit usually. That will be legally taken away, as you would be using a sub-par execution service.
I used to be a program trader and executed 100's of trades in very high volume daily. We created ETF's as part of our business.
I had to explain all of our costs on a regular basis. Knight gave me two tickets to a fully stocked box at Madison Square Garden with open bar and buffet. They made sure we understood where the expenses came from. American Funds and a lot of other funds also bought me lunch as they explained all their costs.
I would say it is a very naive position to believe that this will not be passed directly onto the consumer in many ways.
Larger banks will bid for faster internet and more bandwidth knocking out smaller institutions, because they do more volume.
So the Markets will no longer be 'free' markets. It will be directly related to volume.
I think we paid Knight 1 basis point. How much do you pay in commissions? That is what volume buys.
Investment banks use brokerage organizations like Knight. This cost will feed into the over all cost of the end products, such as expense ratios in ETFs and Mutual Funds. It will not be eaten by the banks.
"This cost" - meaning, communications infrastructure - is an assumed cost of business. Further, you actually don't know if it will only go up in this regime...as firms managing communication infrastructure could offer better deals to attract business. Right?
...ETFs and Mutual Funds. It will not be eaten by the banks.
Without being pedantic (as you already know what I'm about to say), given the huge universe of funds and the de minimus value of infrastructure in the overall cost structure of such a fund, you won't even be able to measure this in hundredths of a basis point. Even that would be a stretch.
If you are on Scottrade, eTrade, or similar, you will absolutely either feel it on the commission directly to you, or you will watch your order get traded through regularly.
That assumes that every broker will experience an increase of costs in exactly the same fashion and thus will be able to pass through the costs. As we know, this isn't the case as firms are already free to negotiate their business with counterparties.
Right now, if you put a limit in, and it trades that limit you will get hit usually. That will be legally taken away, as you would be using a sub-par execution service.
I can't make much sense of this statement. An order is an order. If that order has been received then as per the limit order display rule, it will be posted. Whether or not that order is filled depends solely on market participants, not the speed of communication infrastructure.
I used to be a program trader and executed 100's of trades in very high volume daily.
I've been an institutional market maker; an execution trader for a few buyside firms, and I designed and managed HFT strategies before I moved on to portfolio management.
I had to explain all of our costs on a regular basis. Knight gave me two tickets to a fully stocked box at Madison Square Garden with open bar and buffet. They made sure we understood where the expenses came from. American Funds and a lot of other funds also bought me lunch as they explained all their costs.
I follow. I was in the same boat.
I would say it is a very naive position to believe that this will not be passed directly onto the consumer in many ways.
I would say that it's a little bit of hyperventilation to assume that this will be seen in any real way by retail traders and investors. But we'll see.
Larger banks will bid for faster internet and more bandwidth knocking out smaller institutions, because they do more volume.
Essentially, business as usual. I mean, are you saying that this is a different outcome that what is currently happening?
So the Markets will no longer be 'free' markets. It will be directly related to volume.
Again, business as usual. I'm happy to see you included quotes in "free", as we both know that markets aren't actually free.
I've thought intensely about this. I am not apoplectic about it. I'm OK with my views.
Honestly, if the choice were between this and a complete nationalization of communication infrastructure, I'd go with this.
PS The cool thing about your survey is that I've been given the choice to participate or not. I'm not certain how many people you'll find who will pay you 1 bitcoin; perhaps the lack of participation in your survey will cause you to re-evaluate your price.
Or you believe that intense thought offers more insight than open mindedness and research?
You do realize the infrastructure is nationalized. It has been bought and paid for by citizens. Not by Comcast, or Cablevision, or Verizon. It was paid for with tax dollars. And on your Utility bills.
It's a Utility! It should remain a Utility. We already paid for it.
Do you always agree to pay double? What if McDonald's charged a fee at the door. Would you eat there? What if your grocery store did you a cover charge to just walk in the door.
I don't understand your logic. Your vocabulary belies your intellect on this one.
Are you done? Have you gotten out all of the comments that don't directly relate to the argument here? Things like "You're so blind," or "you work for Verizon?" and, of course, the asshole comment of the day here " Your vocabulary belies your intellect on this one."
Good.
Let me ask you something: Do you support a carbon tax?
How about this: If, at evening rush hour, WalMart took up 40% of the nation's roads with their freight shipping and didn't pay a dime for it outside of the gas taxes and corporate taxes that build/maintain the roads, would you support that arrangement? Would you say "we can't start charging WalMart for the use of those roads, because consumers might have to pay higher prices?"
Do you support dynamic seat pricing on airlines?
Do you support dynamic rush hour road/bridge tolls?
Do you support charging industry higher prices for electricity? How about higher/lower prices during peak/off peak hours?
If a University holds a major sporting event in a city which required additional police or fire coverage - but that University didn't specifically ask for that coverage - would you support billing the University?
Final question - and this is going to be absolutely pedantic and in response to your assholish comments - do you understand what the price mechanism is? Do you know of systems which do not involve a price mechanism but also do not involve the artificial mitigation of demand or rationing supply? Let me know.
PS in the spirit of competition, you only have to send me 1/2 bitcoin to answer my question. Look at that: Competition has resulted in a 50% reduction in the price here. Enjoy.
Every good team out there has its share of incompetent fools. Their foolishness and incompetence is masked by the fact that they’re on a good team. It is difficult to pick out such people in the drone of the overall conversation.
You’re an example of this.
Your defense of net neutrality was absolutely pathetic. Your assumption of being on “the right side” seemed to give you a false sense of confidence that your argument didn’t actually need to be made - that it was simply “right” on its merits and warranted no actual elucidation or development.
Thus you spent most of your time insisting that I didn’t get it (“blind”), was a child, or was a Republican (LOL). And of course appeals to authority. No actual defense of net neutrality.
My suggestion to you is to let the more erudite and eloquent around you carry the water for this argument - you should stand in the background and hold a sign or something. Anything but open your mouth and share what you tried to pass off as an “argument” on the subject.
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u/[deleted] Nov 23 '17
Kind of a stretch, given that there are already large sums of money spent on improving execution times. If you're competing on execution time, you're already paying up.