6 ms·
The boring truth is that average Joes, who interact with the markets only via their retirement index funds, are better off with HFTs. Not necessarily a lot bet
by tutufan 9y ago
The boring truth is that average Joes, who interact with the markets only via their retirement index funds, are better off with HFTs. Not necessarily a lot better off, but that's because HFTs really don't affect them much at all.
Certainly some Wall Street firms have been displaced by HFTs. But really, who cares?
- murbard2 9y agoThe average Joe who interacts with the market by picking stocks or day trading (which he shouldn't do) is substantially better off with HFT (though he still shouldn't do it).
- mac01021 9y agoWhy substantially better off?
- jshaqaw 9y agoBecause hft means the bid ask spread on most transactions has shrunk to trvial/nonexistent (I am a professional investor but not hft...I'm very lft).
- murbard2 9y agoIn fact the retail investor can get an even better deal than the bid ask spread through internalization of the flow, but that comes in the form of paying no commissions. The marginal cost of a retail trade for a broker is negative (but acquiring the customer is still expensive).
- mac01021 9y agoDoesn't that just mean that all the really attractive offers have been snatched up by the high-frequency traders? Wouldn't those lucrative, high-spread opportunities otherwise be available to a regular day trader?
- mjfl 9y agoNo... because regular day traders aren't market makers, they are market takers. HFTs are bad for other market makers, because they are basically competition. HFTs are good for market takers, because you get a good price.