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To: elmatador who wrote (36264)	10/16/2010 6:05:13 AM
From: axial	Read Replies (2) \| Respond to of 46821

Your argument has nested inferences: "There two groups of people working on HFT. The outsiders looking in to profit from the imperfections of the system. The ones trying to improve the system pushing the technology boundaries." [1] Outsiders? [2] Imperfections? [3] Improve? These are not "outsiders." They are the markets themselves, operating with traders who pay them to exercise forbearance: forbearance they would not have exercised until they became for-profit enterprises. Is an increase in systemic risk "improvement"? Please explain. Imperfections? A system that worked well for over 50 years suddenly has "imperfections"? Or is this simply an "exploit"? Please explain how an "exploit" is an improvement. Please explain why we should believe apologists who claim that HFT "supplies liquidity" when in fact the Flash Crash report established that HFT decreased liquidity. Please explain how another decrease in liquidity during a major event (war, 9/11, major selloff) will "help" markets. --- "It has also been argued that the events during August 2007 were linked to reduction of liquidity, possibly due to risk reduction by high-frequency market-makers during that time." Statistical Arbitrage: Stat-Arb And Systemic Risk: Events Of Summer 2007 servinghistory.com Jim

To: elmatador who wrote (36264)	10/16/2010 9:45:37 AM
From: ftth	Read Replies (1) \| Respond to of 46821

re: "Since speed of light cannot be increased, we must kill distance." Propagation velocity does vary based on material properties of the medium. The propagation velocity, as a percent of the "speed of light in vacuum" is highest for wireless, lowest for fiber, and coaxial cable is in between. Roughly, (where c= speed of light in vacuum): wireless: 98% of c coax cable: 87% of c fiber: 68% of c Your homework assignment is ;o)... If the transit time of the signal through the transport medium is so important as you are implying (the propagation velocity can be increased), why don't the HFT systems instead use wireless (30% faster than fiber) or coax (19% faster)?