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>It is no longer a market a small investor can make money in except for buying after bad news and long term. Investors need HFT to compete now. How is this a b
by QuantumChaos 13y ago
>It is no longer a market a small investor can make money in except for buying after bad news and long term. Investors need HFT to compete now.
How is this a bad thing?
A person is still quite able to invest, in the sense of buying an index fund. Why does it matter if a small investor can't profit by trading on news? Isn't this a sign that the market is efficient?
- drawkbox 13y agoYes, but most of the fat is trimmed by the HFT hedge funds, even long term now, the last vestige of growing wealth. It is a very good thing that there is buying on the dip as a natural force of the market. The good news market is almost totally owned by HFT and already pre-baked. But the speed of the algos trims much of what would go to smaller investors that really are needed just like consumers. More volume and movement is always good but being so efficient it takes most of the gains from the support structure of the market harms confidence. Lots of the gaming happens pre-market and post-market where small investors can't always play and where the HFTs own by scraping 80-90% off the top, over time the delta is big. HFT does have benefits being so efficient though, may even help prevent bubbles because it can trade without emotion.