Re:High-Frequency Traders Push Closer to Light Speed with Cu...
by kasey_junk on Wednesday December 16, 2020 @04:12PM
(#25448758)
> "Evil" HFT is a rent seeker that just can get in front of the trades you make without adding value, you're just paying an extra penny or something for transaction.
Importantly, those don't exist.
With the bid-ask spread being wider, that adds a transaction cost to every trade, as you can't sell for the price you just bought. This means that trades are more expensive and riskier. HFT provides liquidity that reduces those risks.
HFT seems to me to be one of those words that means two different things and people select the version of HFT that fits their arguments. "Evil" HFT is a rent seeker that just can get in front of the trades you make without adding value, you're just paying an extra penny or something for transaction. "Good" HFT is a market maker with tons of info who just gets there first every time because they're FAST.
You can see how the amount of info HFT turns it "good" or "bad", and that's a tightly held trade secret for most of the trading firms, so it's a grey area.