Back in my day we used to call people who snuck into buildings and stole things "burgalers".

No, we can't use Pluto any more, it's not a planet. Uranuscrats?

While he's awesome, I wonder how this made it to the front page of Failblog before it made it to Slashdot.

Yeah, but they'd need to wait until the story falls asleep before they can read it...

High-frequency trading harms longer term investors by distorting prices.

Fundamental to the orderly functioning of markets is the idea that asset prices reflect the underlying value of assets they represent. In the case of stock markets, this means that the price of a stock at any given time should represent the perceived value of the assets it represents. This implies that trades are being made which reflect informed opinions and judgments about whether the current price of an asset accurately represents the present and/or future value of its underlying assets.

However, algorithms do not have the capability to make these types of judgments. Nor do they care about the present or future relationship between price and actual underlying value. All they care about is pricing inefficiencies.

This is why high-frequency trading is so dangerousi.e. because it does not care about the relationship between underlying asset value and current price which is the underpinning of orderly and well-functioning markets.

Why would any sane person invest in the stock market when they have no faith that asset prices are accurately reflecting the value of their underlying assets? High-frequency trading is now such a high percentage of overall trading volume that the long term value of an asset barely factors into its current price at all.

Ten years ago, a billion shares a day was considered to be huge volume.now its 4-5 billion shares a day, and let me tell you, all that extra volume isn’t coming from rational investors making judgments about the long terms values of stocks.

-The algorithm, rather stupidly, bought high and sold low.