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What positive purposes does HFT server, appart from making yourself money at the expense of the stability of the overall economy? """replacing human market mak
by yaix 14y ago
What positive purposes does HFT server, appart from making yourself money at the expense of the stability of the overall economy?
"""replacing human market makers with computers"""
That is not HFT, that is just automated trading. The damaging part if the "HF", not the "T".
- skorgu 14y agoThe structure of many markets causes trading to be latency sensitive, full stop. There's no bright line between automated trading and hft afaict.
- sseveran 14y agoNo. The dominate strategies of HFT firms are market making and related arbitrage such as latency arbitrage between venues. There is nothing nefarious about having a computer do this in general as it is much more efficient than a human doing this. These strategies are not very complicated and instead require a lot of infrastructure to run. It used to be you needed to buy or rent a floor seat at the exchange to be able to run these types of strategies. Today that money goes to servers, hosting and engineers. Automated trading, such as statistical arbitrage would be lower frequency, although often still high frequency by most peoples standards. This algorithms often are liquidity takers from HFT.