A flurry of
international activity aimed at putting limitations on computer-based
speed-trading was striking during the Fall of 2012 in the U.S. because regulators had been slow to act. Typically, the NYSE has been viewed by the world as the Mecca of
efficient investment markets. Paradoxically, however, efficiency may be improved by restricting—meaning
regulating—the masses of computer-enabled quick trades that take advantage of
momentary microscopic arbitrage opportunities that are too quick for the human
hand. The American conventional wisdom seems to be that regulation and
market-efficiency are inversely related, rather than complementary. This
assumption might be overly simplistic, coming from an inherited ideology.
Fortunately, the rest of the world has not been following the SEC.
The full essay is at "Stock Market Efficiency."
The full essay is at "Stock Market Efficiency."
