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There have been studies proving that the majority of HFT traders are net liquidity 'takers'. The notion that HFT provide liquidity is false but the industry sti

• gaika 14y ago
  It is an ecosystem, of course traders with fast computers would try to fill all the niches they can. Take a look at a broader picture: http://www-rcf.usc.edu/~lharris/ACROBAT/Zerosum.pdf http://www-rcf.usc.edu/~lharris/ACROBAT/Zerosum.pdf Is suspect those in "Panel C: Losers who expect to profit from trading but will not" are complaining the most.
  • seeingfurther 14y ago
    You're citing a very old paper that makes no mention of HFT? Not sure I follow the reasoning for the citation. No one is saying that speculative traders don't serve a function in the market place. However you said "HFT serves the same purpose that human Market Makers and Specialists" when it has been proven they don't. HFT want you to believe that they serve some altruistic purpose to the marketplace to legitimize their existence. The truth is that HFT serves as a quasi-tax on each and every share traded because to execute a trade in today's marketplace non-HFT volume almost invariably passes through the hands of HFT volume thereby shaving pennies of profit off each trade.
• natec 14y ago
  This paper is a joke. It only looks at the S&P futures. If I added liquidity in SPY or any of the other S&P ETF, hedged my exposure by removing liquidity in the futures, they would consider me an 'aggressive' trader. They're missing 90% of the picture.