| My initial comment was discussing speculative trading in general, but since you mostly brought up some common anti-HFT tropes I might as well address them. > Many HFT jump out when things get volatile, when liquidity is actually required. Do you have a citation on that? If you look the preliminary Q1 results of Virtu Financial [0] (only publicly traded HFT) they seem to be doing more trading than ever in these volatile markets. > Ultimately HFT is doing nothing of societal value, the race down to zero is never-ending and we are wasting huge amounts of resources on a totally pointless march towards zero. HFT is a mature industry. Latencies have mostly stabilized, and profitability is way down in the last few years. Many firms are merging/consolidating. So in the past few years society is actually spending fewer resources - both financially and from a human capital standpoint on HFT than it did in the past. > Exchanges should introduce random delays to allow market participants who really want to hedge / buy / sell, then we can shift some of the resources to the real world. IEX is doing something relatively similar to that for a few years now. They have ~3% of US equities market share. People have the option of trading there but they mostly choose not to. > The system is hugely inefficient. The costs as latencies get lower are ever higher, for an extremely similar end result. The law of diminishing returns. Due to consolidation, costs are actually decreasing. Could it be that the market is... working? [0] - https://ir.virtu.com/press-releases/press-release-details/20... |
Similar story from Flow Traders:
https://www.flowtraders.com/sites/flow-traders/files/quarter...