> Something like a minimum holding time is a more reasonable approach. However, there's not a clear cut answer in any case.
Why do you want to reduce high frequency trading?
Why do you want to reduce high frequency trading?
This article has a lot of the reasons. I think loss of confidence in Market Integrity is the most important one.
I'll contest the "confidence in the market" hypothesis, however. As more investors move to index funds, I don't believe "confidence" as defined would have any significant impact by increasing or decreasing, because fewer participants overall will be actively engaged.
I do think if confidence in the market gets low enough it is possible that people will stop investing all together or invest less than they would have. But that is me sidestepping the issue a bit.