<object width="526" height="374"> <param name="movie" value="http://video.ted.com/assets/player/swf/EmbedPlayer.swf"></param> <param name="allowFullScreen" value="true" /> <param name="allowScriptAccess" value="always"/> <param name="wmode" value="transparent"></param> <param name="bgColor" value="#ffffff"></param> <param name="flashvars" value="vu=http://video.ted.com/talk/stream/2011G/Blank/KevinSlavin_2011G-320k.mp4&su=http://images.ted.com/images/ted/tedindex/embed-posters/KevinSlavin-2011G.embed_thumbnail.jpg&vw=512&vh=288&ap=0&ti=1194&lang=&introDuration=15330&adDuration=4000&postAdDuration=830&adKeys=talk=kevin_slavin_how_algorithms_shape_our_world;year=2011;theme=a_taste_of_tedglobal_2011;theme=what_s_next_in_tech;theme=to_boldly_go;theme=new_on_ted_com;event=TEDGlobal+2011;tag=Technology;tag=complexity;tag=computers;tag=social+change;&preAdTag=tconf.ted/embed;tile=1;sz=512x288;" /> <embed src="http://video.ted.com/assets/player/swf/EmbedPlayer.swf" pluginspace="http://www.macromedia.com/go/getflashplayer" type="application/x-shockwave-flash" wmode="transparent" bgColor="#ffffff" width="526" height="374" allowFullScreen="true" allowScriptAccess="always" flashvars="vu=http://video.ted.com/talk/stream/2011G/Blank/KevinSlavin_2011G-320k.mp4&su=http://images.ted.com/images/ted/tedindex/embed-posters/KevinSlavin-2011G.embed_thumbnail.jpg&vw=512&vh=288&ap=0&ti=1194&lang=&introDuration=15330&adDuration=4000&postAdDuration=830&adKeys=talk=kevin_slavin_how_algorithms_shape_our_world;year=2011;theme=a_taste_of_tedglobal_2011;theme=what_s_next_in_tech;theme=to_boldly_go;theme=new_on_ted_com;event=TEDGlobal+2011;tag=Technology;tag=complexity;tag=computers;tag=social+change;&preAdTag=tconf.ted/embed;tile=1;sz=512x288;"></embed> </object> Kevin Slavin on HFT's and their impact on life.
A good confirmation of the arms race Wall Street has become! In the end the pricing mechanics are going to break down. Volatility will increase and drive out human traders. Then it will be computer vs. computer.
Fantastic video, thanks for sharing. <a href="http://en.wikipedia.org/wiki/Technological_rationality">It</a> is inevitable, and also a part of what makes us human. It's the negative externalities that I find interesting, which of course are never modeled by the executing parties. And certainly not the regulators, who are still mucking around in balance sheets, compliance examiners, and registering RIAs.
Markets will drop, then go nearly completely flat for(several) years, then the biggest bull market of all time will emerge---- we are on the cusp of this playing out now... HFT inspired regulations and just the very market itself will cause the change to happen very very quickly surf
The fascination with algo-trading is mostly overblown. Yes, 70% of trades are computer driven. So what? Market structure on a >5 sec chart hasn't changed much. True, HFT order flashing and quote stuffing violate FIFO, screw traders, undermine confidence and should be illegal. That's the real story. The bots going after bots who go after bots... it's all a complex, evolving ecosystem that beats in rapid synchronicity. Nowadays, computers trade for humans against other computers (who trade for humans). It hasn't changed structure, with the exception of fat tails... Most HFT'ers go for penny shavings.
Growing up in the 'hood was rough, NB. I had the crap kicked out of me several times a day, but a stint in el Salvador with the contras turned the tables.
Many would disagree with you. See themis trading blog for a practioners view. Not saying I agree with Joe, just showing the otherside of your post. Surf