I'm talking about independent studies. Even some where the researchers were expecting the reverse result. Regardless, what you're describing isn't correct. Orders are executed in time order. There isn't a way for am HFT company to "get in front" once they "see a big trade". I've been working in HFT for nearly 8 years. I actually know how this stuff really works. We don't manipulate markets, or jump the queue, or any of the usual accusations. We'd be in jail. We use strategies that are basically the same as those that existed before computers. It's simply that competition has driven down latency, and margins, but increased efficiency and liquidity.

HFTs don't do those things. That's libelous. Manipulation and fraud are illegal, and constantly monitored for by the exchanges, sros and the SEC. You're making a lot of accusations, but you have no evidence, do you?

Nope. It isn't meaningless, it completely refutes your original statement. You seem to think that a speed advantage is everything, which is nonsense. If it were so, HFT would dominate in trading profits, but they don't. Not by a long way.

I'm afraid he's wrong. Many studies have demonstrated that HFT market makers help stabilize markets during high volatility due to the liquidity they provide. I've seen first hand the volume of passive trades market makers provide. Its very real. Plus it's how they make money - so it wouldn't be very profitable if it weren't real, would it?

You claimed that speed is better than information, and my example shows how ridiculous that is. Speed can allow you to lose money quickly too, you know? Your new argument is lost on me. It sounds simply like jealousy.

I'm sorry, the facts are on my side. Equity exchanges match in price time priority, regardless.

That's not how it works. Liquidity is the amount of shares available to buy or sell at any moment in time. They are provided by market makers who keep "quotes" active at the best prices at the exchanges. The exchange matches orders to quotes, and nobody can get in between the way you describe. High liquidity means that someone wanting to buy or sell quickly can - any market order will immediately match at the exchange. Low liquidity is the opposite - you may have difficulty finding a buyer or seller for you to trade with.

No, the broken trades did not eliminate the half billion dollars that Knight lost. Quite the reverse. The broken trades were mostly "clearly erroneous" trades because they executed at wildly wrong prices. Lots of traders did make money at Knight's expense. Such is the risk of trading.

A rare moment of upvoted clarity. Slashdot used to be a place of rationality. Now it's dominated by loud ignorance.

This just isn't true. HFT isn't speculation. And the current markets are highly efficient, meaning all information about an instument is very quickly included in it's price, largely because of HFT. If this weren't true arbitrage would work, and largely it doesn't anymore.

This is absolutely correct.

HFT trades on exchanges, where that kind of preferential treatment cannot occur. More BS from the ignorant.

What damage has HFT caused? Be specific.

That's a complete fabrication. What you describe is called manipulation and is specifically illegal. The SEC and exchanges monitor for this kind of activity. Nobody would stay in business long doing that.

This is just plain false. Suppose you know that AMD is going to rise 5c, and place an order at an exchange for the current best bid. The HFT market maker has less info, and trades with you at yiur given price. He takes at most 1c and you take 4c. This is the best you can do because of the spread, and the market maker may well end up losing in the deal, since he sold at the bottom. What magic do you think the HFT company has?