> Your "last weeks newspaper" analogy is very misleading and insulting. Why not just be honest and admit it's a still legal loophole used to fleece people via being able to complete more actions in the same time?
No, the analogy is apt. It's the normal operation and actual purpose of an exchange... If you're too slow to act, the information from the news release, represented in the price on the exchange, gets absorbed into that price, and you can no longer profit from it... The faster you can react, the more opportunity you have to 'correct' the price AND profit.
That is the way it SHOULD work.
HFTs do that every millisecond... I don't think you do it all.
Many HFTs not only decrease volatility, there are AI systems that 'read' the news and respond to it... Sure, Berkshire Hathaway Industry stock prices might temporarily become overvalued every time Anne Hathaway stars in a new movie, but those who know that can profit from it, and by profiting from it, fix the price... but the AI is profitable ON AVERAGE.. and therefore good... and a better AI that can solve this problem generally will be more profitable still!
> So everyone wins according to you - of course ignoring the sucker that paid more for the shares than if they had time for direct contact and the sucker that sold at a lower price than if they had time for direct contact.
If you studied exchanges, from a game theoretic point of view, or especially a free market theory point of view, the answer is clearly yes.
If there was some rule that somehow we could make the guy who bought too high last week, and the guy who sold too low today get together and come to an agreement at better prices for both of them... we would have punished the guy who, last week, at the right time, realised that the price was too high and sold, and we would have punished the guy who today, at the right time, realised the price was too low and bought! You can't help the first two EXCEPT by removing the opportunity for the latter two to have traded.
And we want more the of the latter two guys trading and less of the former ANYWAY... and this is actually what the market does...
So yes... everyone wins.