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If we're all going to cite Vanguard, we should at least get the quote right: There are literally hundreds of strategies that are high-frequency trading, rangin
by klochner 13y ago
If we're all going to cite Vanguard, we should at least get the quote right:
There are literally hundreds of strategies that are high-frequency trading, ranging all the way from those that really perform much of a market-making and liquidity-providing function to perhaps some on the opposite end of the spectrum, where they are abusive and trying to manipulate the market, " he said.
Obviously, we need to get rid of those types of high-frequency traders, but I think the bulk of them are creating liquidity and reducing spreads for us, which has dramatically reduced costs.
- crdoconnor 13y agoThey said the same thing about the mortgage market abuses - "Oh, it's just a few bad apples." No. No it fucking isn't. Furthermore, letting the bad behavior go unpunished means the 'good' behavior gets driven out: https://en.wikipedia.org/wiki/Gresham%27s_law https://en.wikipedia.org/wiki/Gresham%27s_law "Good" HFT strategies are nowadays obvious by one very salient fact: they're not very profitable. Most market making now, for instance, is simply cover - noise trading, basically - designed to disguise the real bad behavior (that the OP conveniently states is just 'very rare'... heh). HFTs aren't dumb. They know that any regulator or prosecutor will find it very hard to dig through the trading data and discern evidence of illegal behavior from individual trades.
- deleted 13y ago[deleted]