As much as I'd like to see HFT go away, I really can't see it happening. Most of these firms are in bed with the exchanges anyway, plus its computers, and that is the direction everything is heading. Since when has anything good happened for us small traders? It's all based around what the big high-vol firms are doing, they are the market, 60-80% of the volume? What hope do we have? I fear it's just going to be super-computers battling it out against each other and we all go back to driving trucks, same as it won't be long before we don't need drivers for cars, or people serving us in shopping centres.
I think the regulations that stop HFT will not come from the exchanges,they will come from the people that regulate them or committees set up to look into this debacle. If the markets were working correctly then I would agree that anyone would be foolish to go against the majority volume providers,but over the last few years since HFT introduction we have seen a deterioration in market quality. Also I think the speed at which the HFT became so prevalent caught the regulators out,too much of a coincidence that everythings turned to shit at about the same time as HFT took hold. I'm still of the opinion that they are on the way down,either the TT puts them out or speed bumps in the mkt,but something will definitely happen. They will exist in some capacity but not in the way we know today.
http://uk.reuters.com/article/2011/11/25/cme-infinium-fine-idUKN1E7AO1C920111125 Taken from another thread but very valid to this one.
Yeah $850K for three incidents.....to a HFT firm....they probably pulled that out of their back pockets. Get the message across, make it $850m lol.
The electronic firms do not get an exemption from the message-to-fill ratio policy on the CME according to published policy that I am aware of; anyone know different on a definitive basis ?