> Damned if they do, damned if they don't I guess.

Why can't the two be bad in their own way? It's like the mob switching from extortion to burglary, and saying, what, you didn't want us threatening people so we're not – now we're just stealing; what more do you want from us? I guess it's damned if we do, damned if we don't...

I missed the part of the article that claimed all speculation is bad.

I did not, however, miss the part of the article that explained why charging for early access to information is socially useful (it pays for the information to be gathered). But I guess if a human uses that info it's ok, while if a machine uses that info it's evil. Or something.

How is market makers aggressively competing for positions bad?

It's not "let's take over the world" bad, it's just a lot of effort expended on something that's of little value. Working a lot towards something that isn't any good could be thought of as a kind of bad.

Yes but what are the unintended side effects & are they worse than what you are curing? Removing the pits in exchange for electronic trading is a huge win. It's unclear how to keep that win & skincare hft.

The author's point is clear - that HFT adds no value to society ("socially worthless").

I don't believe that he wants to prevent anything, but he suggests that trades should be taxed to create some value to society from this. He is suggesting their value (at the moment) is exclusively to the benefit of making rich people - who can pay for access early information and technology - richer.

It's not clear what journalism of this quality does to create some value for society. Just sayin'.

Well, fortunately for you his journal isn't a quasi-governmental entity.

Unfortunately for your argument, our stock markets are. They wouldn't be remotely viable if they weren't supported and regulated by government. In exchange for the tax payer funded assistance is the social benefit of keeping the whole thing running.

Or would you like to test the viability of a market with no government oversight and no government enforcement of contracts?

How would you build a newspaper or magazine without government enforcement of contracts and copyright?

If you want to claim an HFT shop is "quasi-governmental" because contracts are enforced, then basically every enterprise in the world is "quasi-governmental" (except for the black market).

First, the NYSE gets way more government support and oversite than The Atlantic.

Second, copyright enforcement and free speech have defined limitations for the betterment of society.

I don't follow your comparison. Shouldn't it be Atlantic :: Joe's HFT Shop and NYSE :: Copyright Office? You do know that HFTs don't work for NYSE, right?

Of course, our markets are subject to many regulations. I don't see how it follows that we need more regulations, specifically banning or taxing HFT. HFT is already taxed, btw. Everyone pay SEC fees in the US on stock sales and stamp tax in the UK. Traders pay income taxes on their trading income. Common sense says, unless there is some clearly demonstrated harm to society from HFT, leave it alone ( subject to existing regulations)

There is a subset of HFT (Arbitrage) that does have a value to society, because it allows you to trade between markets without fearing that you're somehow losing out (Because the arbritage players would have swept that up).

>allows you to trade between markets without fearing that you're somehow losing out //

The corollary to that is that your trades as a mere producer are never going to be [indirectly] profitable because all potential profits from varying price have been swept up by others who're not producing goods/services but instead are only operating to extract value that would otherwise go to producers.

But then there's the producers who would otherwise be selling their produce too cheaply.

Arbitrage provides an important financial service to the market... Arbitrage reduces / eliminates price differences across markets. It improves market efficiency.

It's really concerning how little people itt understand about markets

>It improves market efficiency. //

Is it worth the cost?

What cost? The only disadvantage is to traders who were previously benefiting from price differences, which only exist at the expense of entities who are losing out due to the same differences.

Traders are already taxed. They make money from their trades and pay income taxes on this trading. If, however, you tax the trading itself, there will be less of it, significantly less and, most likely, the total taxes collected will decrease

This argument seems to apply equivalently to VAT/sales tax, which in my mind makes it weak. (Consumers are already taxed on their income etc)

There's no reason to believe total taxes collected will decrease. If actors still benefit from HFT post-taxation, they will still trade, and pay the tax.

Sorry but you are clueless. Taxing the trading itself will raise the cost of trading, this making it less profitable if it is less profitable people will do less of it.

VAT is paid on the difference between what you obtained a good/service for and what you sold it on at. The clue is in the name - "value added". You can even get a refund if you make a loss. A transaction tax would be charged at both ends whether or not you make a profit.

It will also harm people who have mutual funds in their 401(k) plans via higher fees.

It's plain simple trading luddism and it's been going on for decades. There was massive resistance to the computerisation and networking of the stock markets, which only succumbed via foreign competition.

Lots of people who lived on being in a racket where passing orders and pushing buttons was extremely valuable saw their livelihoods endangered. Now the same happens to people who make a living on trivial short-term market decisions. Computers do it better and quicker.

Yeah, any time people object to theft, it's "trading luddism".