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If you're unfamiliar with short selling, here's how it goes:
All trades go through a central computer system. When someone, we'll call him Harry, decides to purchase shares in a company, his purchase goes through the system. The system then reads the purchase before it's completed, buys the exact amount of stock Harry was TRYING to get, and then re-sells it back to him at a higher price.
Basically, the purchase is hijacked.
Why the hell is Wall Street allowed to get away with this?
All trades go through a central computer system. When someone, we'll call him Harry, decides to purchase shares in a company, his purchase goes through the system. The system then reads the purchase before it's completed, buys the exact amount of stock Harry was TRYING to get, and then re-sells it back to him at a higher price.
Basically, the purchase is hijacked.
Why the hell is Wall Street allowed to get away with this?
Posted in these groups: 
Economics
Economics
Posted 10 y ago
Responses: 1
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Supply and demand. Capitalism. Greed. Take your pick.
Your question, while relevant and insightful, is loaded. No answer will ever justify the reason for it. Essentially, if you want something and you want it now, the supplier will make you pay more than if you can wait. It is the same thing as paying for overnight shipping vs. waiting the 3-5 days for standard shipping. You pay more to get what you want now. You'd figure in the "instant gratification" generation this would be done away with, but it is a means to make money, so why do that?
Your question, while relevant and insightful, is loaded. No answer will ever justify the reason for it. Essentially, if you want something and you want it now, the supplier will make you pay more than if you can wait. It is the same thing as paying for overnight shipping vs. waiting the 3-5 days for standard shipping. You pay more to get what you want now. You'd figure in the "instant gratification" generation this would be done away with, but it is a means to make money, so why do that?
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SPC Anthony Rock
Here's the thing, that's not what's happening. The transaction is milliseconds long, if that, depending on the connection. This is called "scalping" and "flipping" in almost every other form of commerce, and it's often illegal. In this case, it's ILLEGAL to peer into someones stock purchases without consent, but they're getting around that petty little law by redirecting their purchase before it's complete. It's an invasion of privacy.
All they're doing is hijacking a transaction and making money ON TOP of all the fees they charge for the investor to make this transaction in the first place.
All they're doing is hijacking a transaction and making money ON TOP of all the fees they charge for the investor to make this transaction in the first place.
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