High-Frequency Trading
Algorithmic trading is getting a little out of hand:
“For high-frequency trading firms that use powerful computers to pop in and out of positions in milliseconds, so-called collocation, or "colo," is a pricey necessity. That's because trade times are approaching the speed of light, and the only way to make light reach its destination quicker is to shorten the trip.” – smartmoney.com
This kind of trading accounts for an estimated 70% of US market volume. It’s completely disconnected from any kind of intrinsic value and only creates a benefit for the HFT firms and the exchanges that pocket the fees and exorbitant server hosting fees.
It’s like installing an ATM skimmer on the capital markets.
I think we need some way to enforce a hold period to discourage this business model. It could be an actual window that forces you to hold stock for a few days before selling (actually a few minutes might help), more likely a tax or fee that is prohibitively high at the millisecond turnover rate but ramps down to nothing after a week.
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