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Sweet the spreads are reduced. Thanks HFT! I've been up all night worrying about them. Everyone profiting from HFT are trying desperately to convince everyone

Sweet the spreads are reduced. Thanks HFT! I've been up all night worrying about them. Everyone profiting from HFT are trying desperately to convince everyone else that they provide a service and benefit and they just can't understand why normal folks aren't buying it. The amount of power of HFT to move markets is frightening. Like, for example bogus assassination tweet sending the stock markets plunging $136 billion in two minutes* * http://www.bloomberg.com/news/articles/2013-04-23/fake-report-erasing-136-billion-shows-market-s-fragility http://www.bloomberg.com/news/articles/2013-04-23/fake-repor...

bluecalm 10y ago
As an average individual investor who thinks that keeping significant part of my net worth in stocks is a good strategy I do care about spreads and I don't care about market plunging $136 billion for a day or two. Why would I? Why would anyone? The company is still there, standing, producing, paying dividends. I couldn't care less about it plunging 50% for few hours because some suckers decided to sell some stocks for half the price. Maybe I can even benefit by buying then. HFT is a godsend for your average investor who can now save money when buying/selling stocks instead of giving it to greedy traditional brokers on their overpriced services.
- barrkel 10y ago
  As an average Joe, I feel exactly the opposite. Spreads don't affect me much because the commission on a purchase or sale is so high and I trade infrequently. High volatility is what would make me more dyspeptic.
- twic 10y ago
  As an average individual investor, you're buying and holding for the long term, in which case you actually don't care about shaving razor-thin slices off spreads.
  - bluecalm 10y ago
    I do care. If I buy stocks to hold and sometimes re-balance the difference between spreads between liquid stocks (as in markets with active HFTs) and not liquid stocks (as for example in market in my country) is huge. Those things add-up. I also want efficient arbitrage done by HFTs. I don't want to sell or buy being unaware of some important news. HFTs ensure I get a fair price without following the news every time I want to buy/sell something. The more efficient the market, the more liquidity and the lower the spreads - the better it is for me as an individual buy and holder.
Dwolb 10y ago
People also might care if most of their retirement rests with some large insitutional investor. So if you invest with an active mutual fund, HFT is either a) detecting any large move the fund makes and pushes up the price of the asset before the trade completes or b) making you use a more costly service to complete the trade secretively to hide it from HFT detection. Passive funds might trade less but their moves are so widely broadcast you don't really need algorithms to detect them.

bluecalm 10y ago

As an average individual investor who thinks that keeping significant part of my net worth in stocks is a good strategy I do care about spreads and I don't care about market plunging $136 billion for a day or two. Why would I? Why would anyone? The company is still there, standing, producing, paying dividends. I couldn't care less about it plunging 50% for few hours because some suckers decided to sell some stocks for half the price. Maybe I can even benefit by buying then. HFT is a godsend for your average investor who can now save money when buying/selling stocks instead of giving it to greedy traditional brokers on their overpriced services.

barrkel 10y ago
As an average Joe, I feel exactly the opposite. Spreads don't affect me much because the commission on a purchase or sale is so high and I trade infrequently. High volatility is what would make me more dyspeptic.
twic 10y ago
As an average individual investor, you're buying and holding for the long term, in which case you actually don't care about shaving razor-thin slices off spreads.
- bluecalm 10y ago
  I do care. If I buy stocks to hold and sometimes re-balance the difference between spreads between liquid stocks (as in markets with active HFTs) and not liquid stocks (as for example in market in my country) is huge. Those things add-up. I also want efficient arbitrage done by HFTs. I don't want to sell or buy being unaware of some important news. HFTs ensure I get a fair price without following the news every time I want to buy/sell something. The more efficient the market, the more liquidity and the lower the spreads - the better it is for me as an individual buy and holder.

Dwolb 10y ago

People also might care if most of their retirement rests with some large insitutional investor. So if you invest with an active mutual fund, HFT is either a) detecting any large move the fund makes and pushes up the price of the asset before the trade completes or b) making you use a more costly service to complete the trade secretively to hide it from HFT detection. Passive funds might trade less but their moves are so widely broadcast you don't really need algorithms to detect them.