I called InteractiveBrokers and their cost + exchange stamp duty = around 0.3%=30bps (somewhere around that figure)... which I think will make HFT very hard to do in Hong Kong for HK stock exchange... Any thoughts?
Absolutely And the situation is very unlikely to change. HKEx is a quasi-government organisation, managed like a very typical civil service department, with no commercial outlook whatsover. Their AMS platform for tradng stock is the worst-performing platform in Asia, the latency and throughput is shocking. Vested interests in the local broker community will make sure it remains that way also, so they don't have to compete. HKEx has an extremely bureacratic approach to anything they do, note the ridiculous testing schedule and paperwork required for the current AMS 3.8 upgrade - a very trivial upgrade. The trading community in HK is hoping the Chinese government will eventually realise the current HKEx management are holding back the development of HK and will allow a more forward-looking and commercial exchange such as SGX to buy HKEx. For now you can forget about HFT trading in HK.
I think market makers [most HF] in HK get a reasonable rebate / concession. Also, remember that it's all about relative costs not absolute. Everyone quotes wider. .. As for retail punts in HK â yeah, expensive. But that doesnât stop them .. In a country where gambling is mostly illegal, punters will pay up to scratch that itch. Just means theyâre cleaned out faster. Retail trying to do âHFâ or otherwise. .. A few years ago the early HF players did quite well in HK, largely because of that crazy unrelenting spec retail flow that was willing to pay wide spreads. Canât stop punters from punting.
What group of players are you defining as the trading community? Assuming this claim (lack of development progress) has any substance, why does this 'trading community' believe that Beijing would wish to accelerate HK's development vs. Shanghai?