What do traders think about stopping high-frequency trading by having financial markets clear every second?

Traders generally do realize that a technological arms race to trade faster is not efficient and my guess is that most of the participants in this space would rather have their success or failure come down to the strength of their models and algorithms, not their hardware.  That said, the proposal of batch auctions does not have much of a chance of working in the real world. Markets trade globally and information that affects one market generally affects other markets, too.  If the S&P goes up by 0.01% during the course of a second, then a stock on the Toronto Stock Exchange will likely also go up by a bit.  So the only way that this would practically remove the need for low latency technologies is that if all global markets adopted this model and all global markets were co-located.  Moreover, as long as there are some continuous-time price discover mechanisms that exist, the "true price" of an instrument will change during the course of the auction, and it would be advantageous to enter the auction as late as possible in order to reflect that information. Finally, removing price-time priority could have unforeseen implications on order size and risk management.  Assuming that the thesis is that high frequency trading does add value to market efficiency but the technological race takes away some of that efficiency, this proposal may not be a net gain. Larry Harris, chief economist at SEC and author of Trading and Exchanges, wrote an interesting piece that a friend pointed me to recently, http://blogs.cfainstitute.org/investor/2013/04/24/what-to-do-about-high-frequency-trading/, which proposes another idea to reduce the technological arms race: Fortunately, a small and easily implemented change in exchange rules could substantially reduce the incentives to acquire the expensive trading technologies now required to compete successfully as a high-frequency trader. Regulators should simply require all exchanges to delay the processing of every order instruction they receive by a random period of between 0 and 10 milliseconds. Without this rule, any high-frequency trader with merely a one-millisecond advantage over a competitor will always beat that competitor. With this rule, the faster high-frequency trader will beat the slower one only 59.5% of the time. (If the two high-frequency traders were equally fast, the rate would be 50%.) Both traders would still want to be faster, but the benefits of speed would be greatly reduced. This small change would substantially reduce technology expenditures by high-frequency traders without any negative effect on the quality of the markets. Instead, by lowering the costs of entry, it would ensure that HFT remains a highly competitive business in which traders primarily compete against each other by improving prices and quoted sizes.

Everything will be solved with a CLOB. http://en.m.wikipedia.org/wiki/Central_limit_order_book

This is a classic example why the term "academic" is considered a bad thing in the industry.  The model doesn't describe how investors actually trade, because 1) most "investors" don't care about the moment to moment changes in price.  If you are a hedge fund and you are a longish investor, then the size of the order book spread is going to be small in comparison to the random day to day fluctuations. 2) if you really do care, then you spend the money and hire a HFT firm to do execution for you. This proposal wouldn't work.  What would happen is that someone would create a secondary market that does sub-second HFT and then dump the orders on the main market.  You already have something like this with the CFD and warrant markets in HK and London. The second problem is how do you *force* someone to use the single batch market?  It's pretty trivial to create a new exchange, and if you force people to use continuous time batching, then you'll find that people who don't like it will go to another exchange, and once your liquidity goes there, you'll lose all of the trade advantages. You can try to pass a regulation through the SEC.  a) good luck fighting lobbyists and b) even if you succeed, you can create an exchange in another country (Isle of Man sounds nice).  You wouldn't be trading stocks on that exchange.  You'd be trading contracts which match the price of the stock on the main exchange, and since Isle of Man is a center of online gambling, those contracts would be legal under Manx law. Finally, the problem is self-limiting.  There is a finite pool of money available through HFT.  Once you've mined all of that money (and we have pretty much done that), there is no new money to be made.

In case you're a normal person, your eyes take around 400 milliseconds to squint once. High-recurrence trading is a sort of business sector action that moves in under one millisecond to spot and exploit a chance to purchase or offer. It happens through trading calculations, programs that decide how to exchange in light of quick moving business sector information. The sort of benefit opportunities that high-recurrence trading searches for aren't the things most financial specialists ever consider. They're not wagering that innovation organizations will see their benefits develop more rapidly than anticipated, for instance, or that a retreat is coming. Benefits in high-recurrence trading have tumbled to around 0.0005 for each offer, or a twentieth of a penny, for the most part because of rising rivalry and less unpredictability, which make benefit open doors for the trading calculations. There's new reporting, then again, that recommends that high-recurrence trading may be withdrawing from the share trading system just to spread to other financial markets, similar to securities, monetary forms, and subordinates.