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I've never liked this explanation because most HFT is just front-running. The liquidity is there already, they're just shaving their cut off the top in most cas
by mdtusz 6y ago
I've never liked this explanation because most HFT is just front-running. The liquidity is there already, they're just shaving their cut off the top in most cases because they can move faster than everyone else.
- neolog 6y agoIsn't the market more liquid if new prices come in every day rather than every week?
- vmception 6y agoThe market is already liquid and also more liquid. Strategies that had less efficacy at $100mm position sizes now can scale to $10bn position sizes. I like the growth of liquidity.
- SamReidHughes 6y agoHFT is not front-running. Front-running is a form of trading on non-public information.
- bananaface 6y agoSome forms of HFT work by getting information from other exchanges before you, then front-running on price differences.
- SamReidHughes 6y agoThat's not what front-running is.
- lucaspauker 6y agoThis is arbitrage, not front running. Front running requires not-public information.
- denotational 6y agoFront-running usually refers to a fairly specific scenario in which a brokerage or fiduciary executes orders as principal prior to dealing on behalf of their client so as to benefit from a market movement they anticipate will be caused by the client's orders. This is categorically not what HFT firms are doing.
- deleted 6y ago[deleted]
- smabie 6y agoI work in HFT and HFT is not front running. And no, the liquidity would not be there without HFT market makers It's kind of weird that people have such strong opinions about things they know very little about.
- zabzonk 6y agoSo before there was HFT there was no liquidity?
- lucaspauker 6y agoThere were still market makers that provided liquidity. Algorithms can just do it faster than people.
- rcxdude 6y agoAnd cheaper
- newdude 6y agoI don't get it. Reminds me of a blog post were the guy discussed a Portuguese stock, construction industry if my memory does not fail me, that has a "very low" trading volume. When I looked up the stock, (I think the stock was very expensive), trading volume was like 1 Share every 6 months or so. Yes, I guess you could call this "very low" trading volume. So where would HTF come in here?
- smabie 6y agoAn HFT would list buy and sell orders on the book so that if you wanted to buy or sell, you always could.
- RhysU 6y agoI want so many people in these threads to travel back in time so that they can tut-tut the market makers for wearing lifts in their shoes.
- 6y ago