Trading firm buckles under high costs

Discussion in 'Wall St. News' started by Chuck Krug, Jul 11, 2017.

  1. The cost of Frontrunning(c) is skyrocketing?
    Is there no justice?
     
    #11     Jul 21, 2017
    johnnyrock likes this.
  2. JSOP

    JSOP

    Well it's self-balancing. When the cost increases, there would be less arbitragers and when there is less arbitragers there would be more price imbalances and when there is more price imbalances, the profit potential for arbitraging will once again be larger than the cost and would attract more arbitragers and the cycle just goes on and on and on until the balance is reached when everybody is breaking even.

    And that is exactly what the perfectly competitive economic model suggests for firms who are selling the same product/services in the same market facing exactly the same cost, same information, relatively little to no barriers to entry and same everything: at the end the equilibrium is reached when all the firms' cost is exactly equal to the revenue, no excess profit is made which is what's happening to these arbitragers.
     
    #12     Jul 21, 2017