7 ms·

Has HFT any value for the society in general?

• dataviz1000 3y ago
  Yes. It creates liquidity in markets which causes markets to be far more stable and accurately priced. I would put it at worst as morally neutral.
  • relyks 3y ago
    I'd say it depends. A lot of HFT is able to manipulate prices
• relyks 3y ago
  It technically helps increase market liquidity (enabling someone to easily sell or buy new positions) and there's research that it decreases the bid-ask spread, but I don't buy it. If you believe having a small portion of society be able to easily trade stocks, then yes, but imo, I'd say it generally doesn't have any value for society in general
  • euroderf 3y ago
    Seconding that. Nothing in this discussion convinces me that HFT is not simply a money-skimming operation.
• cmcaleer 3y ago
  They add liquidity to the market, so when you (or someone indirectly on your behalf) buy or sell stocks, you (they) get a better price through narrower bid-ask spreads. They also sometimes generate comedy[0]. [0]: https://www.henricodolfing.com/2019/06/project-failure-case-study-knight-capital.html https://www.henricodolfing.com/2019/06/project-failure-case-...
• dmurray 3y ago
  Does a stock market have any value to society in general? If so, should there just be one stock market in the whole world, listing a small set of uncorrelated instruments, or is some level of competition/ variety healthy? We haven't found any way to have those things without either HFT or something more expensive. It's consistent and reasonable to take some kind of fringe anti-capitalist position and answer no on one of the first two questions, but if you answer yes, you end up with HFT providing value.
• tjalfi 3y ago
  Vanguard's Chief Investment Officer said that HFTs are beneficial for them[0]. [0] https://www.sec.gov/comments/s7-02-10/s70210-122.pdf https://www.sec.gov/comments/s7-02-10/s70210-122.pdf