Seeking Alpha

Forget regulation of high-frequency trading, says the ECB's Ewald Nowotny, "it simply has to be...

Forget regulation of high-frequency trading, says the ECB's Ewald Nowotny, "it simply has to be forbidden" as there is no evidence it provides "any added value to the real economy." Not defending HFT, but is that going to be the standard for banning things now?
Comments (5)
  • youngman442002
    , contributor
    Comments (5131) | Send Message
     
    real economy no...but to the bankers that have them..or hedgies...they can steal much faster....and they donate to politicians...a lot...
    13 Sep 2012, 08:51 AM Reply Like
  • davidingeorgia
    , contributor
    Comments (2713) | Send Message
     
    >>and they donate to politicians...a lot... <<

     

    Which explains why you'll keep having them.
    13 Sep 2012, 08:56 AM Reply Like
  • Joe Eifrid
    , contributor
    Comments (343) | Send Message
     
    HFT... "there is no evidence it provides "any added value to the real economy." "

     

    Worse than that. HFT complicates the discovery of true value in the equity markets. HFT allows for those that have the fastest and smartest programs to distort the markets. Volume Synchronized Probability of INformed Trading of VPIN cares nothing about the underlying fundamentals or value of the stocks it is trading. It has been reported that HFT is responsible for 70-80% of all trades. For the average investor that resembles a roulette wheel spinning.
    13 Sep 2012, 09:01 AM Reply Like
  • davidbdc
    , contributor
    Comments (3186) | Send Message
     
    I'm just a Joe-Smoe investor and I fail to see why I care about HFT.

     

    I'm not selling stocks today - or tomorrow - or next week. If I want to buy something then I determine what price I'm willing to pay for stock X and then enter an order to buy at that price (or lower).

     

    I say let them do whatever - just let them lose all their money when something goes wrong. And if/when it does go wrong and they sell 100% of their large stake by mistake and I buy stock X at $3 when I believe its worth $30 - just don't undo the trade. They chose to play this stupid computerized game with their and investors money - and they lost. I chose to be patient and use common sense - and I won.

     

    Do your own analysis and determine your own buy prices and I think that if your patient you'll find all this volume trading stuff often allows you to buy cheaper.
    13 Sep 2012, 12:14 PM Reply Like
  • Remyngton
    , contributor
    Comments (354) | Send Message
     
    Giving a machine gun to a monkey
    13 Sep 2012, 11:12 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs