[echoangle]

The only thing I can think of that would disprove EMH would be an arbitrage opportunity that doesn’t go away by using it. If you can arbitrage continuously and without limit and the difference you’re arbitraging isn’t decreasing, that would contradict EMH. Since that’s pretty much the only claim of EMH, multiplying your money by taking high risks doesn’t really contradict it.

[bdjsiqoocwk]

In HFT there are loads of arbitrage opportunities that don't go away by using it if you're the fastest.

EMH disproven guys.

[chollida1]

That doesn't prove or disprove the EMH.

The EMH says that you can't predict a stocks price in the future give the past data.

HFT just reacts to price changes, it doesn't really predict what it will do in the future so it really has no relevance to the EMH as they are only reacting to what prices did in the past, albiet the very recent past:)

[echoangle]

They do go away, that’s why you have to be the fastest. They also are limited, you can’t arbitrage them with an arbitrary amount at once because this makes the difference disappear.

[bdjsiqoocwk]

By "go away" I thought you meant over time by people exploiting it it would disappear. If you have two exchanges trading the same instrument, whenever the instrument is priced differently you can buy one and sell the other. This will "nerve go away" because it will still be true 20 years from now. Of course that every time such an opportunity occurs itself it has finite capacity.

So, I misunderstood what you meant, but what you meant is even dumber than I thought. What you're saying is a source of free money. That has nothing to do with EMH whatsoever.

[echoangle]

What claims does EMH make in your opinion?

[bdjsiqoocwk]

There's various versions, usually named weak version, strong and strongest. I don't remember which one is which, but the one I find interesting is "all publicly[1] available information is already incorporated into the prices". This is not a statement of absolute certainty but a statement on expected values. The reason I said your claim is dumb is that it's equivalent to "EMH says there's no infinite free money". I'm pretty sure everyone agrees there's no infinite free money, that's so obvious we don't even give a name to that hypothesis.

[1] how to define what publicly means exactly is also a question on itself which is important but not theain point here.

[echoangle]

But „all publicly available information is already incorporated into the prices“ is exactly the reason why there’s no free money. It means that any difference between expected value based on new information is immediately arbitrated away and the actual value adjusts.