So where do we go from here? We humans were vehicles for the first replicator and copying machinery for the second. What will we be for the third?
"[High-frequency trading] is where all the money is getting made," said William H. Donaldson, former chairman and chief executive of the New York Stock Exchange and today an adviser to a big hedge fund. "If an individual investor doesn’t have the means to keep up, they’re at a huge disadvantage."
[A]s new marketplaces have emerged, PCs have been unable to compete with Wall Street’s computers. Powerful algorithms — "algos," in industry parlance — execute millions of orders a second and scan dozens of public and private marketplaces simultaneously. They can spot trends before other investors can blink, changing orders and strategies within milliseconds.
High-frequency traders often confound other investors by issuing and then canceling orders almost simultaneously. Loopholes in market rules givehigh-speed investors an early glance at how others are trading. And their computers can essentially bully slower investors into giving up profits — and then disappear before anyone even knows they were there.
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