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Why is there such a witch hunt against high frequency traders? I understand the brain-drain argument, but I fail to see a direct negative impact on regular inv
by hodder 14y ago
Why is there such a witch hunt against high frequency traders? I understand the brain-drain argument, but I fail to see a direct negative impact on regular investors.
-High frequency traders provide liquidity enabling me to transact with slightly lower spreads. While narrow spreads may only provide a marginal benefit to the markets, how is it harming you or I?
-High frequency traders hardly impact my investing decisions. Has anyone here been burned by a high frequency trader? If so, please share your experience.
-I am unaware of any academic research concluding high frequency trading has caused harm to individual investors.
-The flash crashes that have occured, appear to have been temporary in nature, and therefore have had zero impact on real investors.
-Don't use market orders if you are afraid of getting a trade executed at an irrational price.
-if PG, KO, or similar crashes for a few milliseconds as a result of high frequency trading (which may be a dubious claim) how does that hurt you? You may have the opportunity to temporarily exploit a mispriced security and buy shares of a company at a lower price.
- lmm 14y ago>Why is there such a witch hunt against high frequency traders? There's a decent chunk of jealousy involved; I think it's mostly the way they seem to be making a large amount of money while not doing any "real work". Compare the general attitude towards lawyers.
- jcfrei 14y agothe main, reasonable complaint against HFT (at least from my perspective, besides brain-drain) is the introduction of a higher volatility. since pension funds and other institutional investors dont usually have them same well trained funds managers and sophisticated analytics, yet a much higher volume, they are usually the ones who get it in the pants. the loss might be fractional, since you are usually investing long term, yet a short fluctation (eg. 2 cents, after you started executing your orders) in prices does add up if you're investing upwards of 100 mil.