Panelists answered the following: Do you believe the stock market is rigged – due to high-frequency trading – against everyday investors?
Ruth Erickson: “Though it appears to be legal, it’s a big, gaping loophole that needs to be closed to make stock market trading an even playing field for everyone!”
Mary Zanger: “Yes because high frequency buyers find the best and worst investments and buy or sell quickly. Quick transactions make money for brokers but not for small investors. Best choice for everyday investors would be to buy sun, wind and geothermal whose technology comes out of the universities to invest in sustainable and green-run businesses and hold.”
Jim West: “Not rigged so much as filled with sharks. You’re either a shark or you’re shark food.”
Richard Place: “It’s a pretty simple formula. Stupid is that stupid does. P.T. Barnum figured it out a long time ago.”
Marty Richman: “Yes and no. The technology that allows some traders to front-run the market and similar uses of time-sensitive computer trading is clearly rigging the market. The other cases where market happenings are so intertwined, such as massive use of derivatives, sector bets, etc., are not technically rigging; however, they do have an significant advantage over small firms or individual traders. The end effect is similar to that of a nuclear fission reaction where each individual event releases a tiny bit of energy, but there are so many events that the total is enormous. There were 601 billion shares valued at $18 trillion traded only on the NYSE in 2010. If you increased trade value by one-tenth of one percent (0.001) you would make an added $18 billion a year or $49 million a day, 365 days a year.”
