IF HFT is stopped or slowed down wont that be bad for us?

Discussion in 'Options' started by noob_trad3r, Sep 7, 2010.

  1. those that make money selling options? Because if HFT is gone or slows down wont it lower volatility and trading noise?
     
  2. The only reason a HFT should be adding to noise is if it is losing money. Which means it wouldn't be running long anyways.
     
  3. Not necessarily. any movement up or down contributes to the noise level.


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  4. actually HFT has reduced volatility(contrary to what the SEC idiots think) so we will see more volatility. And more volatility for traders= good:D
     
  5. the kind of noise hft injects has little or no bearing on option vol.
     
  6. So you do not think that Flash crash caused by mismanaged quote stuffing and algos pulling the rug increase Volatility that day?

    I hope they do not remove or stop HFT.
     
  7. May 6th (and prob other "event days"): HFT contributor to the mess.
    Average Day: Reduces volatility.
     
  8. rew

    rew

    I could be wrong but my impression is that whatever noise HFT adds to stock prices is on the order of pennies or fractions of pennies. So it doesn't really affect option volatility all that much. Anyhow, it isn't necessarily more profitable to sell high volatility options than low volatility options, since to have the same odds of success you have to sell further OTM when the volatility is high.