Agreed. ML is the "Wolf Hunter", but in this case, he was hunting sheep. I am astonished by the press's reaction to this. I think a lot of it has to do with the

Agreed. ML is the "Wolf Hunter", but in this case, he was hunting sheep. I am astonished by the press's reaction to this. I think a lot of it has to do with the relatively small and obscure HFT industry - it is not well understood, and it is easier to believe it is rigged than to understand what it is. To even call it "high frequency trading" is not fair - this implied large volumes throughout the day by continuously providing quotes on both sides of a given security. Their PnL comes from the bid/ask spread and rebates for providing liquidity. They are primarily market makers. This is 99.99% of the HFT industry. Instead, ML and IEX are talking about "speed trading" or, as the press has coined it, "latency arbitrage" - they take advantage of their speed to reach exchanges (2 milliseconds vs. 20 milliseconds) to front-run orders and react quicker to new information. These types of trades only happen at points during the day when signals are met, and they do not provide liquidity but rather cross existing orders (often times before the exchange receives the cancel message from the participant) and TAKE OUT liquidity. I would say less than 1% of HFT firms engage in this type of unethical activity. An example: Imagine it's 9:29am and the Dept of Labor Statistics is going to release the monthly unemployment numbers. There is a positive expectation, and so before market open there are a lot of buy SPY (S&P 500 ETF) orders queued. The report comes out at 9:30am as the markets open, and the numbers are bad. Now, a rational investor would immediately attempt to cancel his order for SPX as the market is going to move downward. Imagine at the same EXACT time, a speed trader see's this investors buy order on the book and decided to cross him and sell. Due to his speed advantage, the exchange receives his message to cross before the investors message to cancel. The investor loses out, SPX invariably moves down, and the speed trader then buys everything he just sold for an essentially risk-less profit. A final point is this: for any buy-side market participant (anything from a mutual fund to a "Average joe"), transaction costs are much lower due to the much higher liquidity and tightened spreads that high frequency trading has brought to the markets. HFT is making the markets more efficient. Cliff Asness (Founder, AQR Capital Mgmt) wrote a piece in WSJ talking about this: http://online.wsj.com/news/articles/SB10001424052702303978304579475102237652362 http://online.wsj.com/news/articles/SB1000142405270230397830...