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From : http://deeconometrist.nl/?p=3623 http://deeconometrist.nl/?p=3623 "Before the rise of HFT, when old school brokers were the ones doing the market making

by sien 10y ago

From : http://deeconometrist.nl/?p=3623 http://deeconometrist.nl/?p=3623 "Before the rise of HFT, when old school brokers were the ones doing the market making on the trading floor, the difference between the buy and the sell price was about twenty-five times larger than it is today." The other thing is that HFT firms make less money all together than Goldman Sachs does on its own: "From 2011 onwards, HFT has been on the decline. In 2009, high-frequency traders moved about 3.25 billion shares a day. In 2012, it was 1.6 billion. Not only did the trade volume decrease, HFT firms profit has also been diminished since its heyday. In 2009, the entire HFT industry made around $5 billion trading stocks. In 2013, this was around $1.3 billion before expenses. Today, HFT companies seem to disappear just as fast as they appeared. Its most notable case might be that of Goldman Sachs selling its HFT department recently. This department, which it acquired in 2000 for $6.5 billion, yielded them a mere 30 million this present day." The big investment banks hate HFT firms because they have destroyed their spreads on trades. They push out arguments to get rid of them so they can return too the good old days of making sure they get a cut of each trade. Who pays the Clintons hundreds of thousands for a 'speech'? The investment banks. Not HFT firms, they make too little money and compete too hard.

tombone12 10y ago
Wait, are you saying HFT are great and should be kept because their business model looks like its collapsing?
- positr0n 10y ago
  No, he's saying HFT are great and should be kept because they are a net gain for society. They lower spreads and take margins away from the huge players. So much so, that the big players are lobbying for taxes like this to make HFT less effective so they can make more money for themselves. HFT is just another example of software eating the world and doing a job that used to be done by humans more efficiently. This is a good introduction to the mechanics of what HFT is, written by... yummyfajitas on HN I think? https://www.chrisstucchio.com/blog/2012/hft_apology.html https://www.chrisstucchio.com/blog/2012/hft_apology.html

by sien 10y ago

tombone12 10y ago

Wait, are you saying HFT are great and should be kept because their business model looks like its collapsing?

positr0n 10y ago
No, he's saying HFT are great and should be kept because they are a net gain for society. They lower spreads and take margins away from the huge players. So much so, that the big players are lobbying for taxes like this to make HFT less effective so they can make more money for themselves. HFT is just another example of software eating the world and doing a job that used to be done by humans more efficiently. This is a good introduction to the mechanics of what HFT is, written by... yummyfajitas on HN I think? https://www.chrisstucchio.com/blog/2012/hft_apology.html https://www.chrisstucchio.com/blog/2012/hft_apology.html