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Comment by endymi0n | Hacker News Reader

Oh, and another round of "we HF-Traders are just misunderstood benefactors of the general public and helping markets being more efficient".

There are heaps of evidence HFT ruins markets, economies and nations, so I call BS.

http://www.zerohedge.com/news/2015-03-20/how-hft-destroys-ma...

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Themis trading wrote a report saying HFT is evil? This is about as persuasive as the taxi industry releasing a document saying that Uber is worse than Voldemort or the hotel industry saying AirBnB is the devil.

Furthermore, many of the issues described there are fairly innocuous in reality.

For example, flickering (aka "quote stuffing") is a software bug which costs HFTs money: http://zacharydavid.com/2014/04/on-hft-part-ii-bugs-features... https://www.chrisstucchio.com/blog/2014/quote_stuffing_is_a_...

The issue of HFT being a zero sum game in the race for latency is predominantly caused by the subpenny rule: https://www.chrisstucchio.com/blog/2012/hft_whats_broken.htm...

I'm not really knowledgeable to have an opinion on HFT, but there's something I'm still not clear about.

HFT firms are not that big; the ones I've seen pointed as the largest have net incomes of less than $100M. Why wouldn't the other market participants, particularly the largest Wall Street firms, allow HFTs to ruin their game? The link you posted mentions "corrupt SEC regulators", but why would they be corrupt in favour of HFTs?

Large Wall Street firms view these guys the way a rhinoceros views the birds snatching bugs off its back. It's not a competitive relationship, they coexist.

To push the analogy, sometimes the rhino gets annoyed and pecked too hard, but overall it's happy to live without as many bugs everywhere.

I skimmed some of the evidence there. Nothing seems to condemn the HCF industry as a whole. Some linked articles about it in Wall street journal and Financial Times are behind paywall. And even if HFC would be bad, it's not significant. Your source also says HFC can't hold much equity.

You could have explained me why HFC is bad. Just slamming around some link with lots of "evidence" is not very convincing. Given how easy it is to find evidence about anything these days. It's bit unfair to assume I should gather your argument for you.

Bollocks. Given fund managers are obligated to obtain "best execution" under MiFID (and regulations in general) if HFT were impacting that then they would raise merry hell. The fund management industry is orders of magnitude larger and more influential than all HFTs.

>there are heaps of evidence

>links to zerohedge

credibility = destroyed

Whenever I see a discussion like this a HFT-supporter, like yourself, will usually come along and say that any links which are made to suggest HFT is bad are terrible (often the book flash boys is mentioned), but I never see any evidence of this terribleness, or alternative information sources. Do you have any?

Actually yes, Chris Stucchio's posts on the subject are pretty in depth starting with https://www.chrisstucchio.com/blog/2012/hft_apology.html

You could also look at the book, Flash Boy's Not So Fast, which takes apart, page by page, all the arguments in the book, Flash Boys

http://www.amazon.in/Flash-Boys-Insiders-Perspective-High-Fr...

Sorry to piggyback on your point and rip off Matt Levine a little bit, but most of the cage rattling seems to ultimately come from people who are mad that it's harder to slip in their huge orders without having a price impact like it should.

Sorry, I'm on my phone, but you could start with "Trading and Exchanges" which is available on Amazon (really, any of the highly rated books on market microstructure are pretty good IMO). Also IMO, It would be helpful to use traditional market makers as a baseline when making any kind of comparison to HFT, and asking if it's really worse. For example, total HFT profits have declined from like $5 billion to a little over $1 billion per year, whereas vanguards fees alone allow savers to keep roughly $40 billion per year. There are also a multitude of interviews with large, institutional investors who are extremely sophisticated and who are arguably the main people affected by HFT activities, for example this interview with cliff asness of AQR, which manages $100 billion ++ in quant strategies. https://soundcloud.com/bloombergview/masters-in-business-aqr... I think he starts talking about it around the 30min mark.

Also, my own experience working on a trade floor as a source.

>There are heaps of evidence HFT ruins markets, economies and nations, so I call BS.

HFT itself isn't "bad", period.

Does it have bad actors, stupidity, corruption, inefficiencies and is sometimes a waste? Yes. What industry is immune to this?

Immunity isn't what you should be concerned about. Incentives are the issue here.

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