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I still don't understand the difference between insider trading and HFT firms that get data before other firms.

• tptacek 11y ago
  Which particular instance of HFT firms getting early data are you referring to? Different people might be talking about wildly different things when they say that. The general answer is going to be: the HFT's early access doesn't implicate a principal/agent problem. The people generating the data HFTs act on don't have a fiduciary duty to the shareholders of the companies they report on.
  • dev1n 11y ago
    Ah okay this makes sense. I didn't think about the problem as a principal/agent problem, which is how insider trading is framed. Got it. Thank you.
• onewaystreet 11y ago
  HFT firms don't get data early[1], they just can act on it faster than any human can. 1. There have been a few cases where data was available seconds early on certain feeds, but those were mistakes.
  • dev1n 11y ago
    Interesting so as long as the data is released to everyone at the same time, it doesn't matter if some people are able to acquire that data before it reaches others. As tptacek pointed out below I didn't think about it in the principal/agent framework.