Interesting article,thanks The point about euronext putting fines on over inputs/fill is BS though. They charge for messages sent. 1 message is counted for a 1 lot or a 10,000 lot. Firms currently abusing the system are inputting in huge orders to game the system and never complete. So if the fines were charged per lot inputted NOT messages generated then it would work. Presently it's an exchange/algo workaround to say to people concerned "we're doing all we can",when in fact they aren't.
I just can't see how there can be an argument that HFTs increase liquidity. Yes volume is up but not liquidity. HFT's will be the first bids to back away. Flash crash demonstrated that. There was a time before HFT's and liquidity wasn't an issue then. HFT's are now floor brokers/specialists so to speak. NYSE specialists used to be the guys on the inside raping the market. Now its computers on the outside. When the market went electronic in 2007 it was the first loosing year for the specialist firms. Went from 25 to only 4 firms. Guess who bought BAC's specialist business - Getco. And who created Getco. Founder of BATS of course. No conflict there......... Im undecided. HFT's raise volatility which is profitable to traders but they are now faster than humans and take advantage of all inefficiencies. They are here to stay regardless.
Is volume up? I hadn't noticed. In the derivatives markets treasuries have been depressed for years and more recently volume in the stocks has been significantly lower. I don't claim to know what is going on in every market everywhere so I'm interested to know which markets volume is up in.
Many HFT's were there for the whole thing and had their "best day of the year", according to the Tradeworx honcho, even though he himself pulled the plug. And anyway, just what is an HFT? In liquid issues, aren't almost all bids are put up by HFT's and/or similar buyside algorithms? What does it mean for them to be the "first bids to back away", when they're the only bids out there, ever, period? One type of bid (if you can even call it that) that did back away with complete abandon was B/D internalization/PFOF -- liquidity that's only there when it's virtually guaranteed a profit, apparently. When you can trade against your own clients, why take the risk?
thats not a good argument against it... u could 'create' more jobs if u had of banned car manufacturing and kept all the horse and carts in business.. HFT will kill the golden goose eventually i feel
HFTs are replacing old school. Flush all the old timer traders and bring in the Next Generation of traders (Programmers). Just like the Internet. Flush all the old technologies (Newspapers, phones, U.S Mail usps) and bring in the next generation: internet (Programmers) The next generation of traders require: Higher Education! P.S where do all the old timers trader go after blowing up their accounts? They become a car salesman