Here I summarise the financial market lessons imparted by Ed Thorp in his book “A man for all markets”. My first three sections cover his views on investing, risk and market inefficiencies. My last two sections describe the hedge fund strategies Dr Thorp employed as well as his views on hedge funds in general.
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To lessen the advantage which latency arbitrageurs, such as high-frequency traders, have, two other solutions apart from frequent batch auctions have been proposed, namely speed bumps and transition zones. These two solutions specifically aim to remove the ability of high-frequency traders to front-run using “inside” information gained from securities exchanges.
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Market participants can have a variety of legal competitive advantageous in public security markets. One of the more controversial ones is speed which is exploited by high-frequency traders (HFTs). Should the activities of latency arbitrageurs, such as HFTs, be curtailed or are they beneficial to markets?
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