The Goals of Traders and Investors Are Light-Years Apart
“Today, trading firms pay for the privilege of placing their servers in the same building as stock exchange servers so trades can happen in milliseconds. As Jerry Adler wrote for Wired in 2012, To “make things fair, engineers scrupulously add extra lengths of cable to equalize the runs among all the servers. Yes, we are talking about a few feet plus or minus. At nearly the speed of light.”
This sounds insane to the average investor, particularly when we put it in the context of our investing experience. Most of us are focused on making sure food gets on the table, keeping a roof over our heads, putting a little toward college and maybe saving enough to retire before we turn 70.
The trading game is clearly rigged, but what we should care about — investing — isn’t. When we’re talking about Wall Street firms, we’re usually talking about traders. Traders by profession are much more interested in moving money around and finding ways to extract some in the process.
Average investors, on the other hand, have specific goals that they’re saving for in the long term.”