Observations On High Frequency Trading
Joe Saluzzi of Themis Trading has put together a great synopsis of a High Frequency Trading roundtable held today, called, in traditional HFT egomaniacal fashion, “High Frequency Trading: The New World Order.” Useful insight for many, who have been increasingly inquiring about the topic on Zero Hedge. Joe's conclusions is worth highlighting:
Our equity market is being controlled by machines that are nothing more than two bit, SOES bandits. They cloak themselves under the mantra of liquidity providers but they are really just locusts and are feeding off the equity market until it doesn’t suit them anymore. Once their profit margins are squeezed to almost zero, they are likely just to move on to a new market. But what damage would they have done? We will be left with a shell of a market that is used to being led around by computers. Real people and real capital are a scarce resource in today’s market.
Goldman is all too familiar with providing HFT (and otherwise) liquidity... and locusts.