[twic]

> You said that HFTs jump out when things get volatile. But then I show you evidence that they trade more in high volatility. Do you not see the contradiction?

We should distinguish between volatility at different timescales. An HFT might well be very active over a volatile month, but may still turn off over a very volatile second. I've always assumed that the "HFTs jump out during volatility" complaint was about the latter; it means that when some shocking news hits the market, the HFT firms providing most of the liquidity pull it, and so the manually-entered market orders wanging around end up moving the market further, exacerbating the volatility. Maybe that's not what people are actually complaining about, though.

> HFT firm equipment costs are a few racks of high end servers and some expensive networking equipment

And FPGAs. FPGA development is really not cheap.

[amiga_500]

Exactly, that was my point and I thought that would be understood by someone in the domain. Same for HFT vs "electronic" in general, again someone in the domain would get that distinction immediately.

[traderthrow454]

HFT = electronic trading, or at least the bulk of it. The human traders that existed before HFT firms & HFT desks at banks were largely doing the same thing that HFT firms do now - making markets on a wide range of securities, but less efficiently.

Latency-arb is a small part of HFT, if you consider strategies that provide liquidity to be "good HFT" and strategies that take liquidity (via latency arb or other arbs) to be "bad HFT" then those strategies are largely executed by the same market participants.