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I understand how HFTs are making their money; however, how does this drive up market? Would they not be able to make the same money in a downmarket (a delta is
by lukeqsee 13y ago
I understand how HFTs are making their money; however, how does this drive up market? Would they not be able to make the same money in a downmarket (a delta is a delta, whether you are going up or down)? All I can see this affecting is the billions (trillions?) of dollars in HFTs amplifying whatever the market is doing.
- jjoonathan 13y agoThat was an oversimplification done for the audience's benefit. If the video were a math class, he would have said "without loss of generality, assume that the market is going up."
- sseveran 13y agoIt doesn't since most HFTs (and many other systemic traders) are valuation neutral and trade in both directions.