How HFT Destroys Markets: 50 Pages Of Evidence

Submitted by Tyler Durden on 03/20/2015 20:09 -0400

Back in 2009, when aside from a few insiders, nobody had heard of HFT, Zero Hedge launched its crusade to expose the algorithmic scourge that has since then caused an equity, treasury and now US Dollar flash crash, and has been the subject of a Michael Lewis bestseller and resulted in countless market halts and failures.

More importantly, there is now roughly 50 pages of just bibliography citing the evidence-based, academic research that has shown just how pervasively, maliciously and premeditatedly HFTs manipulate, destabilize, impair and otherwise destroy every single market in which they participate, and what's worse: result in incremental costs to investors, debunking the biggest lie HFTs spread about themselves - that they, being the gregarious humanist vacuum tubes they are, make trading cheaper and more accessible for the small investor.

And the biggest paradox: despite all this proof - which we urge every readers to sent to their favorite SEC regulator - America's corrupt enforcers of securities laws continue to turn a blind eye to all the crime that takes place every single day. Why? Because they collect a portion of the proceeds, of course, and because they need a scapegoat to blame once the market crashes.

We are grateful to "R. T. Leuchtkafer" who put it all together.


Above are all the evidence needed to kill of HFT but no, the corrupted powers in govt would not do so. The Congressmen and Senators would not do so as their pockets are lined by the HFT operators. They would find all the excuses and lie to keep the HFT operations going.

MAS and the MOF must look at the operations of HFT in our system and get rid of it quickly before it does more damage to the dying market. It is getting worse everyday.There is no time to wait.


Anonymous said...

MAS and the MOF must look at the operations of HFT in our system and get rid of it quickly before it does more damage to the dying market.

But surely there must be good reasons why MAS and the MOF did not get rid of HFT in the system as quickly as u had hoped, tio bo?

Or is it being the authority and regulators, do they know something that u don't?

Anonymous said...

What's wrong with collecting more money? It is very wrong if it is cheating the people.

Anonymous said...

"MAS and the MOF must look at the operations of HFT in our system and get rid of it quickly before it does more damage to the dying market."

How much money was spent on SGX computers to facilitate HFT.
That's what I want to know.
Anyway, don't worry lah!
MAS and MOF is "on our side" ... right?

Anonymous said...

Don't be fooled by all the talk about trying to rein in the system. It is all controlled by the super rich with the blessing of the authorities. When all the wealth is eventually transferred to the super rich at the very top, then you will see the authorities wayanging about putting in controls.

It doesn't matter to me anyway because I don't dabble in the stock market.

Anonymous said...

What can they do about all the evidence?

Nothing. They don't put a gun to our heads and force us to put in our money.

Just let the greedies destroy each other. The world would be a better place.

patriot said...

Think it is best that the Casinos and Stock Markets are Alk CLOSED.


Does it matters if there is no Turf Club?
Yes is my answer, for it could have meant that my Friend did not have to kill himself few days back.


Ⓜatilah $ingapura⚠️ said...

Whenever there's a shit-ton of money involved in an ongoing dynamic mechanism---which is essentially a zero-sum game running 24/7---it is natural to leap into the fray and pick one side of the fight---the side which accords with your own already preformed BELIEFS.

Just because "evidence" comes from academia doesn't make it true. To assume that it is true is making an Argument From Authority. Anything claimed to be "evidence" has to be tested over and again, not just by neutral parties, but especially by the parties who hold the opposite position in the argument in question. In todays world, any bloody fool over the age of 14 years old, with a computer and spreadsheet, can string together a bunch of data and call it "evidence".

RULE #1: Never absolutely believe anything you read on the internet. Leave room for doubt.

IMO, Algorithmic trading is not going to go away---even though its detractors can prove its toxicity. It might change or morph into something else---like delays purposely added so that HFT traders can't beat others to the punch.

However, the use of algorithms themselves is going to continue, because nearly every aspect of our modern lives is already controlled by algorithms. everything from turning on a tap to get water, to driving your vehicle and stopping at traffic lights.

Our pocket-sized smart phones have more computing power than the machines used on manned space missions, the launching of nuclear missiles, and medical tech of 30 years ago. Everything we do on those phones which we cannot keep our hands and eyes off are run by thousands of algorithms---from clicking "likes" on FaceBook to sending IMs, email and SMSs, to watching YouTube or porn, and of course trading FOREX, shares or whatever.

>> MAS and the MOF must look at the operations of HFT

I think they are already doing so. Their decision will be based on WHAT in the end, makes the MOST MONEY for Singapore.

Pragmatism lah. Morality---optional.

Anonymous said...

The end justifies the means. Cull all the daft sinkies and replace them with fake foreigners.