Are Markets Rigged?

I haven’t been paying too close attention to the Michael Lewis furor but I hear it’s all quite entertaining. Here’s a somewhat different perspective:

Information changes markets.  The reason that I mention bond trading, even though my target is stock trading, is that it was a *far* more rigged market because it was dealer-driven, and voice-to-voice.  It was far easier to lose to more skilled brokers, than trading stocks online today.

More here. The key takeaway for me is that in financial markets, ‘rigging’ is indistinguishable from ‘competitive advantage’ and is mostly a question of time and resources.

Tread carefully when incredibly sophisticated market participants accuse each other of cheating and remember the parable of the baptists and bootleggers.

updated: here’s some pro-HFT stuff.

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