<p>There is nothing wrong with your idea. Some people may say that it would reduce liquidity - but there is way more than enough liquidity in the system already. HFT is just parasitical - it serves no useful purpose.</p>

<p>A small <a href="https://en.wikipedia.org/wiki/Financial_transaction_tax" rel="nofollow">transaction tax</a> would have a similar effect.</p>

CC BY-SA 3.0
2016-10-14T14:01:04.540Z
2016-10-14T14:01:04.540Z
Mick
<p>Part of how high frequency trading works, is by taking advantage of millisecond advantages over other traders in communicating with the stock exchange. </p>

<p>To gain these advantages, high frequency traders have moved their servers closer to the stock exchange's server, or <a href="http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10736960/High-frequency-trading-when-milliseconds-mean-millions.html" rel="nofollow">have rebuilt a a Chicago - New York IP cable to be straighter</a> and thus reduce latency by milliseconds. </p>

<p>To create a 'fair playing field', <a href="http://www.wired.com/2012/08/ff_wallstreet_trading/" rel="nofollow">traders can put all their servers in the same building, and each be given the same length of cabling.</a> </p>

<p>HFT has been criticised essential for giving the high frequency traders an unfair advantage. </p>

<p>My question is - why not just make the stock exchange work on a one second 'tick'. ie. during that second trades are queued up, and on the tick, they are all executed simultaniously. </p>

<p>This would prevent any - 'see other people's trades and buy them before they do' type trades.</p>

CC BY-SA 3.0
2016-11-04T09:34:12.540Z
The question [Why do stock exchanges not operate at a fixed frequency?](http://economics.stackexchange.com/questions/9414/why-do-stock-exchanges-not-operate-at-a-fixed-frequency) has been answered now and in particular the SEC article that Hector links to gives some experimental evidence of a lower bound when the frequency stops adding value in general.
sshine
CC BY-SA 3.0
2016-03-06T00:47:04.940Z
This question has been asked before, but so far there is no answer: http://economics.stackexchange.com/questions/9414/why-do-stock-exchanges-not-operate-at-a-fixed-frequency
Giskard
<stock-market><arbitrage>
What's wrong with have a 'one second tick' on stock market trades, to prevent high frequency trading?
dwjohnston
# What's wrong with have a 'one second tick' on stock market trades, to prevent high frequency trading?

(Asked by: username_0 on 2016-03-06)

Part of how high frequency trading works, is by taking advantage of millisecond advantages over other traders in communicating with the stock exchange.

To gain these advantages, high frequency traders have moved their servers closer to the stock exchange's server, or [have rebuilt a a Chicago - New York IP cable to be straighter](http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10736960/High-frequency-trading-when-milliseconds-mean-millions.html) and thus reduce latency by milliseconds.

To create a 'fair playing field', [traders can put all their servers in the same building, and each be given the same length of cabling.](http://www.wired.com/2012/08/ff_wallstreet_trading/)

HFT has been criticised essential for giving the high frequency traders an unfair advantage.

My question is - why not just make the stock exchange work on a one second 'tick'. ie. during that second trades are queued up, and on the tick, they are all executed simultaniously.

This would prevent any - 'see other people's trades and buy them before they do' type trades.

**Tags:** stock-market, arbitrage

> **Comments:**
> **username_2**: This question has been asked before, but so far there is no answer: http://economics.stackexchange.com/questions/9414/why-do-stock-exchanges-not-operate-at-a-fixed-frequency  
> **username_1**: The question [Why do stock exchanges not operate at a fixed frequency?](http://economics.stackexchange.com/questions/9414/why-do-stock-exchanges-not-operate-at-a-fixed-frequency) has been answered now and in particular the SEC article that Hector links to gives some experimental evidence of a lower bound when the frequency stops adding value in general.  

---

## 1 answers

### Answer by username_3 on 2016-10-14. Score: 2

There is nothing wrong with your idea. Some people may say that it would reduce liquidity - but there is way more than enough liquidity in the system already. HFT is just parasitical - it serves no useful purpose.

A small [transaction tax](https://en.wikipedia.org/wiki/Financial_transaction_tax) would have a similar effect.


---

