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0 pointsthw09j9m3y ago0 comments

Generally, illegal trading resolves around the idea of trading on non-public information. And front running falls under that category (access to order data that other participants do not).

However, HFT's do not trade on non-public information. Every participant has access to the same market data. I could start my own "HFT firm" tomorrow; I would just be incredibly unsuccessful at it because I don't have the finances or computing resources to execute.

0 comments

md_3y ago

Right. I think we're saying the same thing?

thw09j9mOP3y ago

I think I'm missing the connection between how HFT's trade and how it takes money away from regular people.

md_3y ago

This is a pretty widely discussed question, and while I think the empirical evidence is so far unclear, there are some obvious theoretical models where costs for large institutional investors (like pension funds) go up. E.g. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2238516.

Pinging (https://www.finra.org/investors/insights/getting-speed-high-...) would be an example such strategy.

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0 pointsthw09j9m3y ago0 comments

Generally, illegal trading resolves around the idea of trading on non-public information. And front running falls under that category (access to order data that other participants do not).

0 comments

md_3y ago

Right. I think we're saying the same thing?

thw09j9mOP3y ago

I think I'm missing the connection between how HFT's trade and how it takes money away from regular people.

md_3y ago

Pinging (https://www.finra.org/investors/insights/getting-speed-high-...) would be an example such strategy.

j / k navigate · click thread line to collapse