Monkey Trader

High-Frequency Trading good or bad?

Economy & Market

I found an interesting video.
http://finance.yahoo.com/video/why-warren-buffett-wrong-high-132644317.html

Since most people here want to be quants, I'm curious what your guys think about HFTs. Specifically, I'm curious about the spin people put on their use of quote stuffing and other techniques to appear as like they are adding liquidity.
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Posted on : 2024-04-22 03:23:26.492384
 
SuperB
Quote stuffing is not HFT, although HFT does include quote stuffing.
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Posted on : 2024-04-22 11:48:15.886213
 
Nic C

HFT is just a fast messaging technologies used for trading. It can be good or bad depending on how it's used. Just like a high speed car. It can be used to get you to the hospital faster or get you into an accident.

A lot of the opposition to HFT is coming from the old guard who don't want to spend the money to upgrade their infrastructure.

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Posted on : 2024-04-23 03:16:59.102420
 
Ivan

HFT's have routinely used market manipulation to sometimes layer the book with fake liquidity to make it look like the book has depth and then remove it in a flash.

This is just one example of how HFT's use their speed advantage to destroy the faith and trust of market participants. Especially algo's that try to manipulate the market into triggering momentum movements, or initiating stop hunts to trap short sellers.

All HFT strategies seem predatory and I firmly believe that they provide no value what so ever to the market and need to be removed.

If you have the patience to read all of these articles highlighting the problems with HFT. Other than the profit being earned I really see no value, and a loss of trust with the general public has become an issue when you have algo's that can read the news faster than humans, requiring everyone to use algos to play the news

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Posted on : 2024-04-25 01:58:37.470368
 
I can beat Buffett
Original Posted by - b'Ivan':

HFT's have routinely used market manipulation to sometimes layer the book with fake liquidity to make it look like the book has depth and then remove it in a flash.

This is just one example of how HFT's use their speed advantage to destroy the faith and trust of market participants. Especially algo's that try to manipulate the market into triggering momentum movements, or initiating stop hunts to trap short sellers.

All HFT strategies seem predatory and I firmly believe that they provide no value what so ever to the market and need to be removed.

If you have the patience to read all of these articles highlighting the problems with HFT. Other than the profit being earned I really see no value, and a loss of trust with the general public has become an issue when you have algo's that can read the news faster than humans, requiring everyone to use algos to play the news

Actually, what you're saying is not accurate as there are many different types of HFT algo. Some of which add value, others which are predatory.

Some HFT algo is designed to take arbitrages in the market which is good to make the market more efficient.

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Posted on : 2024-04-25 03:44:11.207011
 
Bumblebee
Original Posted by - b'Ivan':

HFT's have routinely used market manipulation to sometimes layer the book with fake liquidity to make it look like the book has depth and then remove it in a flash.

This is just one example of how HFT's use their speed advantage to destroy the faith and trust of market participants. Especially algo's that try to manipulate the market into triggering momentum movements, or initiating stop hunts to trap short sellers.

All HFT strategies seem predatory and I firmly believe that they provide no value what so ever to the market and need to be removed.

If you have the patience to read all of these articles highlighting the problems with HFT. Other than the profit being earned I really see no value, and a loss of trust with the general public has become an issue when you have algo's that can read the news faster than humans, requiring everyone to use algos to play the news

HFT just game the system until the loophole goes away, whether by regulation or it being arbitraged away. Is it better to add value directly? Yeah sure, I think most of us agree with that.
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Posted on : 2024-04-25 07:29:04.739202
 
Kelvin Yeung
Well, those quants are creating value for their customers.
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Posted on : 2024-04-26 12:11:22.473578



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