Famous quotes about the pros and cons of quant high frequency trading aka HFT
“It’s a lot easier for us to teach really smart scientists about markets and trading than to teach traders about programming,
“Speed is now the defining characteristic of the market,” says Adam Sussman, the New York-based director of research at Tabb Group LLC, who has researched the role of high-frequency firms in financial markets.
“High-frequency traders are not interested in the fundamental worth of a company,” says George Feiger, CEO of Contango Capital Advisors Inc., a San Francisco money management firm with $2 billion in assets. “They are only interested in making a quick killing and moving on.”
“Technological advances have outstripped our ability to regulate them,” says Andrew Lo, director of Massachusetts Institute of Technology’s Laboratory for Financial Engineering and chief scientific officer of quantitative-analysis hedge fund AlphaSimplex Group LLC. “It’s like the Wild Wild West.”
“HFTs began to quickly buy and then resell contracts to each other, generating a ‘hot-potato’ volume effect as the same positions were rapidly passed back and forth,” according to the report. Between 2:45:13 and 2:45:27, “HFTs traded more than 27,000 contracts, which accounted for about 49 percent of the total trading volume, while buying only about 200 additional contracts,” the report says.
“If the number of quote-stuffing incidences continues, one or more systems will get saturated,” he says.
“This is truly the brave new world we are trying to regulate,” CFTC CommissionerScott O’Malia says.
“The function of the capital markets is to facilitate capital formation and boost the overall economy, not to assure the profitability of any group of market professionals,” says Daniel Gray, assistant director of the SEC’s division of trading and markets.
“We’re not Goldman Sachs, but this is a good business,” he says.
You can’t put the genie back in the lamp,” says Tim Sargent, CEO of Quantitative Services Group LLC, a Naperville, Illinois, company that analyzes trading costs.
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