Does the exchange make enough in fees so that it has an incentive to overlook the impact of such trading? What if HFT were made illegal? What would happen to total volume.. and total fees paid to the exchange?
The monthly fees are in the five figures to have your HFT server placed INSIDE of the NYSE. The HFT's are breaking their necks to get in there. Good sign? NO!!!!!!!! NO WAY!!!!!!!! While the rest of us get quotes. The HFT's have already seen the best quotes FAR ahead of us, they have been able to front run their orders, all the while the regulators and bureaucrats are asleep at the wheel. This is a SERIOUS problem if not "handled" quickly!!!! The market's integrity is on the line, and this one could be the nail in the coffin if something isn't done. YES, hft's should be ILLEGAL!!!!!!!!!! Give this some time to think out, and you'll see where these guys are harming the markets, NOT helping by their bullshit standby, "we provide liquidity." Phantom volume Quote stuffing Front running This is what HFT's are doing.
The HFT traders are only doing to the market what the market makers and specialists have been doing since the beginning of trading. Buying low and selling high. The public buys high and sells low. The HFT traders are only doing it in much larger volumes and preventing the insiders from running the markets much lower or higher to benefit their investment accounts.
All those tricks will only last so long. Right now this manipulation is being overlooked, within due time this will be significant market news that will finally end this game that the hft's play on a second to second basis.
I was shocked that CBS didn't consult other traders to show that the HFT's are stuffing quotes, creating phantom volume, and front running. Of course, if they had asked those questions of the ONE hft firm that agreed to an interview, the interview would have ended quickly... The institutional block trader they interviewed gave good reasons why the HFT'S are rogue, but he didn't go into the above three which I was sure was coming. Oh well...
The insiders are going to be okay. They have been playing this con game long enough to know how to not let the HFT traders beat them at their own game. The market makers and specialists can still control the market but they have to be careful to not trigger the HFT traders buys and sells orders until they want to pull the trigger. Consistent pattern trading is not too difficult to recognize.
RUB THIS IN; "Half of financial professionals on Wall Street expect to get a higher bonus this year, and some of those expect a much bigger payout, according to an annual survey by financial job board, eFinancialCareers.com." LMAO. Idiots. Man, I 'm blessed to be as far away from "Wallstreet" as possible, as I continue my Private Equity Career. Of course I have to deal with those assclowns from time to time and thank God my reputation is not tied to that Industry.
I had no clue the COO of the NYSE is the Brother of John Stewart of the daily show. http://www.elitetrader.com/vb/showthread.php?threadid=208258 No wonder the NYSE and Wall Street has become such a joke. Literally!
Keep in mind that HFT are only going to cause "Money" to say outa the US STOCK MARKET. The Smart Money that is not teamed up with a HFT group will not flow back into the Dow. Thus, this creates opportunity in areas like Commoities, Private Equity Events outside IPO's, Emerging Markets and the list goes on and on. To continue to bitch about HFTs and stay in the Game of Trading the DOW and Futures market will only lead you to poverty. You have to go where the money is folks.