The Future of High Frequency Trading

Alicia Badilla By Alicia Badilla, 28th Feb 2012 | Follow this author | RSS Feed | Short URL http://nut.bz/epq9rtfd/
Posted in Wikinut>Money>Investing

Will transparency trump fairness and liquidity? An authentic question that will only be answered after the algorithmic impact of High Frequency Trading either succeeds or fails. What will happen when the average investor decides the game is fixed?

Showy "Gentleman"

From what my limited and rather biased brain has gathered in speaking with high frequency traders over the last 12 months is that there seams to be present an aura of guilt mixed with a fair amount of justification involved when asked about their "profession." When interviewing one gentleman (who wished to remain anonymous) who works with 3 other "gentleman" out of a showy mansion in northern California.... my first thought was how tough this smart nerd must have had it till at least after college. There was a degree of vengeful piety in his eyes when asked if what he was doing was ethical. His answer was more along the lines..."I'm badass because what we are doing is not illegal yet."

The future of this new and exceedingly nerdy profession looks dark. If, or as most would say... when Obama is re-elected, it will be the beginning of the end for HFT.

HFT accounts for 65% and 75% of transactions on U.S. stock exchanges.

The SEC may implement filters in HFT traffic. The idea is to slow down the opening of transactions. That may facilitate closing one end of the vacuum that results in bids dissolving resulting in a price colapse.

Other ideas are that the SEC could introduce a rule that all orders must be exposed for a certain amount of time. That will reduce the volume and be a start.

They could also introduce a tax on all transactions mixed with banning rebates. This would not stop but decrease HFT.

One thing is certain, these cybercrooks are unethical and very rich.

Link to Other Wiki Pages By Alicia B
Breaking: Super Committee A Complete Failure
JP Morgan

Outside Links:
www.cmegroup.com

Tags

Hft, How To Regulate Hft, The End Of Hft, The Future Of High Frequency Trading

Meet the author

author avatar Alicia Badilla
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I'm a Traveler/Writer/Investor At times I interview interesting professionals. Thank you for reading.

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author avatar Alicia Badilla
12th Feb 2013 (#)

I called the election back in Feb of 2012! " If, or as most would say... when Obama is re-elected, it will be the beginning of the end for HFT."

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