[yellowstuff]

Is it "fair" that quant hedge funds have hundreds of PhDs developing algorithms to trade the markets efficiently, or that fundamental hedge funds spend millions on research? While there are a few restrictions around insiders trading, it is very much not the case that fairness in the sense of everyone having equal access to all information is or should be the goal of financial regulation.

Matt Levine has written about this many times, here's one:

https://www.bloomberg.com/view/articles/2016-12-06/supreme-c...

[frockington]

I think its fair for people who spend time getting a PhD and refining algorithms to have an edge. What is the argument for why it is not fair?

[yellowstuff]

My point is that in the markets, like in sports, a "fair contest" does not mean that both parties are equally likely to be successful. "Fairness" means that the rules were followed. Right now a PhD with a model is allowed to use his information advantage if he's trading against someone less informed, but an insider to the company is not. It may be the case that insider trading laws as they currently exist are good and help financial markets work better, but if that's true it's not because no one with an information advantage should be allowed to trade.