An information system has four elements, such as: risk, advertising, expenses and record keeping. People risk every time they invest money in exchange. They also risk when they sell their shares. They can either win or lose large amount of money. According to the article, after offering Facebook shares, Nasdaq had some technical problems and cased many delays and chaos (Wallace 27). Lots of people lost their money and were very angry of that. Advertising helps the stock exchanges to do their job. Many people are looking for the income and they can receive it on the stock exchange, both selling and buying the shares. The market is constantly changing. There would be expenses when the person buys the shares or when he or she loses them. Every stock exchange keeps its records. The machines count an income of it every day. People who invest money there also keep their records.
American stock market is rigged by accommodation of the stock exchanges of the Wall Street Banks and everybody who has an investment to stock market. The biggest stock exchanges of the USA are: New York Stock Exchange, Intercontinental Exchange Group and Nasdaq OMX Group.
After the introduction of Nasdaq OMX the way the stock market operated drastically changed. It influenced both technology and people. Patricia Wallace indicates that “improved information system and technology drive price down” (Wallace 27). Nasdaq technology can handle even 1 million messages per second. It is very convenient and helps to “check other exchanges to see if the trade can be rerouted” (Wallace 27).
People make mistakes, are slow in their deeds but the machines never disappoint. They are quicker and do everything according to the program. They don’t make mistakes.
IEX is very popular stock exchange. It gets much money from high-frequency traders.
Many banks use high-frequency trading. It composes more than half of all American trading volume (McCrank). It is legal and highly regulated. But many companies use it for their own benefit and become prosperous. They can identify what the person want, buy it before her and sell it at a higher price (McCrank). It is unfair but it is legal. The companies have special equipment for that and it does 10000 processes for a millisecond. John McCrank indicates that exchanges allow trading companies to place computer servers into the exchange's data centers so that the they can see the data very fast (McCrank).
The specialist of the stock markets Patrick Temple-West indicates that “IEX has applied to the SEC to become a full-fledged stock exchange, but with a special business model that could slow down transactions to discourage high-frequency trading, which the scientists say allows big traders and exchanges to profit at the expense of retirement funds and individual investors” (Temple-West). He also says “IEX announced the rules that prohibit intentional delays in making available orders to traders” (Temple-West).
The information systems and their uses have many ethical conundrums, but the government allows IEX and High Frequency Traders to continue to exist. It will not be banned, because it can make the market less liquid (McCrank). The Government will lose a lot of money which is bad for the US economy. But now it is prosperous and all the sides win.
Works Cited
McCrank, J. U.S. stock markets are rigged, says author Michael Lewis. 2014. Web. Retrieved from : http://www.reuters.com/article/us-markets-hft-flashboys-idUSBREA2U03D20140331
Temple-West, P. High-speed stock trades face big test as SEC nears crucial IEX vote. 2016. Web. Retrieved from : http://www.politico.com/story/2016/06/hold-as-deadline-looms-sec-must-rule-on-flash-boys-exchange-application-224260
Wallace, P. Information Systems in Organizations: People, Technology, and Processes. Pearson-Prentice Hall. 2013. Print.
