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White paper on the pros and / or cons of high frequency trading for hedge funds or a piece of litterature covering the subject

(Last Updated On: August 23, 2011)

Could someone guide me to a white paper on the pros and / or cons of high frequency trading for hedge funds or a piece of litterature covering the subject

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http://www.cis.upenn.edu/~mkearns/papers/hft_arxiv.pdf
Good paper, conclusion is that hype is bigger than profit.

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With respect to your specific question, I don’t think HFT is a good match for hedge funds. Hedge funds provide investment capital, but HFT really doesn’t require much capital as the positions are held for only a short amount of time. HFT is more suitable for prop firms that are willing to make a significant investment in technology, very fast DMA, low latency data and most importantly good man power to generate strategies/algorithms that can consistently compete in a tight market place.

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many hft strategies only work at institutions with a large retail customer base an they make money by front running the customers. It has to be worrying when every bank and hf in the world is moving into the space usually signals that the party is coming to an end

 

 

NOTE I now post my TRADING ALERTS into my personal FACEBOOK ACCOUNT and TWITTER. Don't worry as I don't post stupid cat videos or what I eat!

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