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Politics : Formerly About Advanced Micro Devices
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To: TimF who wrote (107413)4/23/2000 12:03:00 AM
From: Bill Jackson  Read Replies (2) of 1577853
 
Tim, Have you seen the way the brokers have fought the antique fractions system, at last now the SEC has said it must be done.
Well in the same way the methods to eliminate front running are well known...namely an electronic matching system.
They will get dragged kicking and screaming to that system over their dead bodies and the dead are increasing. There is a power shift occuring and the clients as well as the companies are becoming empowered and one fine day we will all trade directly with no brokers, market makers etc with an artificial intelligent(really rule driven, but complex) and then the only fee will be what is needed to keep the system maintained. 5-10 years should see it come to pass.

The brokers all know it will ring in their death knell, so they fight it and delay it at every turn. They have money to pay lawyers and lobbyists and that is why I can see it taking 5-10 years. Some markets have gone to this now, I hear.

With a system like this you could engage in micro arbitrage, the type the brokers do now on the quiet. The internet lemming effect will become more powerful and some time lag will be needed to stop purposeful manipulation by people who second guess trading programs and sell/buy certain volumes and prices to induce a market move which they sell/buy into and make a few tiny bits. They can keep a market in chaos and buy at the bottom of the noise and sell at the top many times an hour. Of course the present system makes this impossible as the MM delay/cost introduces factors to dampen this kind of action out.

Bill
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