As the cost of using a computer program for a small trader is...

  1. 2,372 Posts.
    As the cost of using a computer program for a small trader is too expensive, the ASX is pushing people to use a broker for their trades if they wish to trade this way. As the ASX is owned by brokers, I can see where they are coming from. However this may attract another exchange to commence operation to serve small traders. The part they omitted to explain was the ability for certain banks/brokers to see the DMA orders and try and make money beating them to the market using faster computers. This pushes prices higher.
    All this globalisation and upsizing trading has the danger of bringing the whole markets down as the players get bigger and fewer and mistakes bigger. A big mistake now has been seen to create GFC's. I think the solution is to restrict the size of banks and increase the number of sophisticated traders, thereby spreading the risks and minimising the crash dangers.
    It will prove too difficult to control the Goldman Sachs of this world, but much easier to control the size and activities of them. The US has many laws that prevent businesses controlling retail sectors so it will not prove difficult to reign in the banks via this avenue.
 
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