Posted on 09/11/2020 7:07:49 AM PDT by Theoria
New York Stock Exchange will temporarily run one exchange from Chicago to show its readiness to move
The New York Stock Exchange is signaling that it will move its electronic trading systems out of New Jersey if the state implements a proposed tax on financial transactions.
The NYSE plans to announce that it will run one of its exchanges from a backup site in Chicago for a week as a demonstration of its readiness to quit the state, according to an internal memo seen by The Wall Street Journal.
Like many other exchange operators, the NYSE runs its electronic trading systems out of data centers in northern New Jersey. Such market operators have been concerned about a bill in the New Jersey legislature that would impose a tax on firms that process large quantities of trades in the state.
New Jersey Gov. Phil Murphy, a Democrat, supports the tax proposal.
We take this notion of taxing or some sort of toll on the high-frequency trading very seriously, Mr. Murphy, a former executive with Goldman Sachs Group Inc., said during a news conference late last month. Its something were looking at with a great deal of interest.
The NYSE memo linked to a news article about Gov. Murphys comments. In the memo, NYSE Chief Operating Officer Michael Blaugrund said the exchange operator could quickly relocate its systems to another state if the tax passed.
(Excerpt) Read more at wsj.com ...
...South Dakota has so much credit card processing
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I believe they also do (or did) a lot of medical billing processing, too.
“The high speed trading algorithms have gotten so ridiculous that microseconds matter. A one mile change in length of the wires/fiber optic cables means a 5.3 microsecond change in one direction communication speed. They don’t want to move if they don’t have to.”
correct, all of the client computers trading against the NYSE computers have to have the shortest possible fiber cables between themselves and the NYSE computers, so they all would be forced to move in unison ... but still, i’m sure that would be preferable to everyone involved compared to paying a transaction tax, a tax sure to grow arbitrarily in size as power hungry government continuously seek deep pockets to pay for they profligate ways ...
I don’t see how moving from one “blue” state to another “blue” state is going to help them.
It depends on what the legitimate purpose of the market is. Is it a forum for printing money, or a forum for people investing money and taking measure risks? Right now, high speed trades are effectively using physics to cheat the system, executing trades at a rate several orders of magnitude greater than anything a human could possibly be actively involved with. This isn't the same as algorithm based trading where you make stock picks based on a stock's performance and set limits on how much risk you're willing to take.
High speed trading involves exceptionally accurate monitoring of conditions across the entire stock market, making automated calculations of network latency and fractional pricing differences to chisel off fractions of a penny per trade, but repeating the behavior on a large scale to take in billions of free money with minimal risk to the company and no measurable benefit. Before coinage had standard sizes and theft protection features, unscrupulous people would scrape off fractions of the edge of a coin and return it to circulation. Those people were called chislers. This is the same thing, just using modern techniques.
It's parasitic behavior and increasingly dangerous to the health of the economy as the automated systems amplify market swings at increasing rates.
...and anything else... also venal.
The NYSE plans to announce that it will run one of its exchanges from a backup site in Chicago for a week as a demonstration of its readiness to quit the state, according to an internal memo seen by The Wall Street Journal.
#44 this would explain how good stocks nose dive then go back up on no news. The stock market prices are being manipulated.
#29 Sometimes, you just have to vote with your feet....
All 4 feet in this case :)
This point on the transit time is one touted revenue source for StarLink as a competitor for fiber. The signal can travel through a satellite link with about 40% less delay between two points on the Earth, than fiber optic cable provides.
>>The high speed trading algorithms have gotten so ridiculous that microseconds matter. A one mile change in length of the wires/fiber optic cables means a 5.3 microsecond change in one direction communication speed. They don’t want to move if they don’t have to.
Only the relative distance matters; the big boys are generally collocated with the exchange.
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