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Could you expand on why you think the activity of HFT is "unnecessary trading?"
by consz 10y ago
Could you expand on why you think the activity of HFT is "unnecessary trading?"
- j-pb 10y agoHFT Doesn't generate any value, it just siphons money to the people who do it. Stock markets are the original Kickstarter. However with increasing trading frequency you turn something that generates value for society into a grotesque casino.
- consz 10y agoWhy do people trade against HFT (particularly, HFT market makers) if they just siphon money out?
- j-pb 10y agoSame reason people gamble. You sometimes win.
- consz 10y agoA very, very large majority of all trading volume is done against HFT market makers. Regardless of the non-HFT trader's motivations, they appear to consistently trade with the HFT market maker over some other participant -- why is that? Even in the case when their motivation is to gamble, why gamble with the HFT as opposed to a non-HFT order?
- ksdale 10y agoThe vast majority of stock trades are just trades between two parties (neither of which is the company) that believe different things about the stock. I agree that HFT doesn't generate much value, but by this metric, neither do any transactions besides IPOs.