HFT Myths

Here's my question, which is more "philosophical": Why deploy HFT strategies at all? The primary (only?) advantage seems to be speed, which is basically a technological arms race and depends less on the sophistication of the strategy itself, meaning that whatever advantage you have for the moment will surely fade away, even in the short term.

So what are the pros, in terms of KPIs (e.g. ROI, sharpe etc.) vis-a-vis say "medium" frequency trading (e.g. intraday)? Would you consider your competitive advantage in your ability to _renew_ your strategies, rather than the strength of individual strategies?

 

How about thinking for 1 minute before you post on this board or pay huge tax. We have civilized discussion here which brings related question.

Each time we have flash crash and the like there is a call for tax on financial transactions or more regulations like this exmple above trying to slow speed of the markets. How real are these threats and are HFT firms and exchanges thinking about it in terms of viability of HFT model in the future.

 

i recommend thinking about what i said.

its so easy to flash crash , individual stocks, or the whole kitandkaboodle precisely because there are no real market makers anymore.

hft and their apologists , shills, paid and inadvertent, avoid this fact.

much of market making has degenerated into fleeting frontrunning operations, and very little inventory of positions, and the willingness to take on market risk.

since I'm rarely wrong, you're on real thin ice if you disagree.

 

Daily Increase in HFT:

 

That what market making is about since markets exists!

 

Definition of 'Front Running'
The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients have been given the information.

 

wow, really. amazing what you can learn here on good old et.

 

I agree with this - I think the sort of behaviour outlined is fair.

If you are willing to pay the $$$$ to co-locate and willing to take risk (as opposed to cheating), then I say good luck to you.

This is not an easy way to make money and it's not as if there is no competition.

My view is this is or at least will soon be a very tough play.

 

Very interesting. I trade primarily off the order book and I've never really bothered too much about HFTs despite the fact that they have supposedly "killed that game".

The above caught my eye because it's something I do to get into a trade, hit it as it's leaving and quite often I leave it a bit too late. Is there any more info on the techniques/strategies they use for the above?

 

'unethical'-such word was never in WS vocabulary.never was and never will be