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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting
QCOM 178.39-1.9%11:44 AM EST
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To: Art Bechhoefer who wrote (91470)5/7/2010 6:41:20 PM
From: lml3 Recommendations  Read Replies (1) of 197135
 
Fast trades. High frequency trading by definition is an abuse of the market system because not all investors wishing to enter the market have similar, low cost, timely access to information or trading facilities. . . .

One way to curb the abuse is to apply a surtax to short term trades. A fee of 50% of profits from a short term trade where the turnaround is less than 24 hours might be an appropriate place to start. The fee would be reduced for longer trades until after a three-month turnaround there would be no fee charged on short term gains.

Sorry, Art, but have to disagree with you. First, High frequency trading is not the issue here, but rather high SPEED trading through the use of super computers. This is where all investors are NOT on equal footing, but rather where the big boys have a clear advantage. They can execute volumes of trades is a nanosecond, have instant access to information, both fundamental (i.e. news) and technical (i.e. computing power) that easily dwarfs the capabilities of the individual investor.

To tax "short term" trading is not the answer, as it will only penalize the individual trader both directly, as well as indirectly as the clearing houses are likely to pass on any additional costs in the form of fees.

I think the type of circuit-breaker system that NYSE has in place is something the regulators should look into when evaluating the issues raised by yesterday's precipitous fall
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