[fighterpilot]

Nonsense. Trade can be positive sum in utility to both parties. One party making profits doesn't imply anything about how utility is changing on the other side of the trade. If you buy an iPhone, Apple have gotten richer but you have also gained something (utility).

Your understanding of HFT is wrong as well. It's not all low latency arbitrage. It's also execution finesse, risk management and ML-heavy. HFT firms will still be extremely active under this new market structure.

[Retric]

High turnover rates are part of the definition of high frequency trading. If your holding positions for 30 minutes your not doing HFT. Ultimate buyers and sellers aren’t gaining anything on the timescales we are talking about.

[fighterpilot]

I don't know why you're bringing this up because it's not relevant, and nor is it accurate. You can have high turnover rates in batch auction strategy as well as a continuous trading strategy, this market structure change won't change that. And you can have a HFT strat with low turnover, e.g in a large tick name that barely moves where you might get five latency sensitive trades per day.

[Retric]

Latency sensitivity and Alo trading isn’t the same thing as HFT.

“Very short time-frames for establishing and liquidating positions.” strait from the SEC: https://www.sec.gov/marketstructure/research/hft_lit_review_...

Now it’s true an individual stock may only see 5 trades per day from a HFT algo, but theirs more than just one stock. The larger pool of money sitting around waiting for those 5 trades the lower your ROI. So, the obvious strategy is to reuse the same pool of money to back multiple different strategies.

[fighterpilot]

A HFT that's trading bond futures may only have a handful of trades per day and hold for a long time because it's hard to liquidate effectively. Sometimes they just range all day.

Anyway my point is that it's wrong to think that HFT are going out of business with this change because it's a fundamental misunderstanding of HFT. There's almost always an ML component and always an execution component and these two skills are going to be critical to profiting off the new market structure. Citadel, Jump, Tower, you name it. I promise you they will be all over this new structure.

[Retric]

> all over this new structure

I completely agree, and they are going to use the same tools. The question is if this change is a net positive trade for the economy, and that I don’t know but I have heard reasonable arguments in favor.