The Problem of HFT - Collected Writings on High Frequency Trading & Stock Market Structure Reform by Haim Bodek

Author:Haim Bodek [Bodek, Haim]
Language: eng
Format: azw3
Publisher: Decimus Capital Markets, LLC
Published: 2013-01-14T16:00:00+00:00

Where Do We Go From Here?

After looking at the major industry segments in the chain (HFTs, exchanges, buy-side, sell-side), and seeing how each segment adapted to the current controversy about special order types, market complexity, and unfair and discriminatory practices at the exchanges, it is clear to me that we have a systemic issue in the US equities marketplace that has delayed meaningful reforms that might have otherwise been initiated by the industry. All the groups I have noted are in some manner responsible for preserving the status quo. Based on my assessment of the situation, I made the following forecasts a few months back:

Regulators – We will see regulators strengthen the regulatory oversight of self-regulating exchanges.

Exchanges – We will see exchanges eliminate discriminatory practices and enhance their level of disclosure.

HFTs – We will see HFTs lose advantages and a new emphasis by such firms on market making status and order flow relationships.

Sell Side – We will see electronic trading desks utilize sophisticated features of exchanges appropriately.

Buy Side – We will see institutional investors take more responsibility for their execution performance.

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