HFT Bad?

[martinbutler]

http://www.zerohedge.com/article/pa...y-trading-may-increasingly-destabilize-market

Is HFT as bad as Wilmott thinks?

 

[Menascyn]

These are pretty recent:
http://www.nanex.net/Research/ColdFacts/ColdFacts.html

http://www.wilmott.com/blogs/paul/i...ency-Trading-and-the-UK-Governments-Whitewash
http://www.wilmott.com/blogs/paul/i...-Trading-Where-are-we-and-how-did-we-get-here

 

[martinbutler]

http://blogs.wsj.com/deals/2010/09/...h-crash-high-frequency-traders-saved-the-day/

Of course he defends it but he never mentions that the cause of the flash crash was also hft. Taleb also dislikes HFT. I read somewhere that europe was going to prohibit HFT, anybody know anything about it?

 

[Menascyn]

http://blogs.wsj.com/deals/2010/09/...h-crash-high-frequency-traders-saved-the-day/

Of course he defends it but he never mentions that the cause of the flash crash was also hft. Taleb also dislikes HFT. I read somewhere that europe was going to prohibit HFT, anybody know anything about it?

Was it Germany? It seems like more regulation.
http://www.eurexchange.com/exchange-en/technology/high-frequency_trading/
http://www.efinancialnews.com/story...change-bafin?ea9c8a2de0ee111045601ab04d673622
http://www.zerohedge.com/news/2012-09-26/germany-does-what-sec-hasnt-prepares-ban-hft


Here's one for Britain:

Several European countries have proposed curtailing or banning HFT due to concerns about volatility.

http://www.theguardian.com/business/2012/sep/16/meps-ban-high-frequency-trading

 

[Miqail]

I don't think you can judge HFT as a whole. It's an umbrella term for a wide variety of traders and trading strategies, and a pretty elusive one. If I had to make a call on HFT: I say it's just evolution. Most of the market making/liquidity provision to the market is done by HFT firms, dramatically decreasing the spreads and improving the market liquidity.


Who loses?
(...)
Transaction costs are reduced because liquidity providers are more confident in market prices and require less of a price concession to transact with an order. In finance, this is known as a reduction in adverse selection costs.

If transaction costs are lower, then average investors benefit from synchronization. So, who loses? When prices are synchronized, information diffuses rapidly from security to security and informed investors are made somewhat redundant. In the model, they make less profit as a result.

https://medium.com/the-physics-of-finance/1c76b139eef6



Another excellent article: http://www.bloombergview.com/articles/2014-03-20/why-do-high-frequency-traders-never-lose-money

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[IntoDarkness]

wilmott is full of shit

 

[deadbeat]

wilmott is full of shit

Can you explain why? Just saying that his opinion is shit does not help.