Einstein and the Great Fed Robbery
Below a certain time accuracy, all trading is zero sum. The only reason to be able to trade in milliseconds is to beat someone else. No value is created.<p>Suppose instead that exchanges buffered all orders for, say, 1 hour. At the end of the hour they perform a stable matching algorithm to pair up bids and asks, and execute those trades simultaneously.<p>Are there any downsides to this? It seems like it would eliminate all of this zero sum behavior, and at the same time, increase liquidity, particularly for people who aren't on a fiber line one block from the exchange. You could additionally require all material information to be released at the top of the hour, to ensure a full hour of analysis before any trades are executed.