July 30, 2012
Copyrighted material redacted. Author cites: "HFT and the Hidden Cost of Deep Liquidity", http://tabbforum.com/opinions/hft-and-the-hidden-cost-of-deep-liquidity
absolutely. the HFT are a capital outflow from the market to the detriment of capital formation. it sucks demand so that the prices cannot rise. negative directional trades give the shortsellers advantage, they know the price will be going down. the shortsellers like HFT/high frequency trading because it is in their benefit.
who is holding the bag? investors.
the studies are in error because they make assumptions and do not examine particular trades to see if the assumptions are correct. this is the benefit of sitting in an ivory tower. they do not examine the synergy between options and equities and currencies and derivatives. they do not see how the exchanges benefit or the how the freebies of the exchanges benefit high frequency traders. THOSE FREEBIES are coveted by brokers and HFT because they make the system pay, they enable shortsellers.
it is time to pull back the curtain or most stocks will fall below $1 over time. every day, every hour investors lose $. this is price manipulation.