Investors have the best stock market ever — thanks to HFT

http://chatwithtraders.com/ep-071-eric-hunsader/

Give that a listen if you get the chance. He throws some interesting topics I"ve never heard of like "quote stuffing" as he calls it.

I like how they like to use that better spreads are available to HFT.

Eric makes a comment in that podcast about " How do you measure your spreads? I've seen prices spike 1 percent in a second and the bid/ask spread never be more then a penny". It's a misleading point.
 
RedDuke said:
Apparently HFT is good for us, who knew

http://www.marketwatch.com/story/in...r-thanks-to-high-frequency-trading-2016-05-12
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This was written by a lobbyist for the HFT industry. While he makes some decent points in defending those who pay his bills, it's also clear that he's defending a wide range of activity, some of which is probably beneficial and some of which is toxic. Also, his reference to a 2010 Vanguard letter is a little odd -- not only due to its age, but also due to its later criticism of off-exchange trading that is favored by many of the largest HFT's:
From a regulatory perspective, Vanguard believes this goal is furthered by creating rules and regulations that entice all market participants to place displayed limit orders.

Displayed limit orders are the building blocks of transparent price discovery. Today, traders are not encouraged to display their limit orders. A market structure designed to create incentives to display limit orders (or at the very least not disadvantage them) will lower transaction costs for all investors. Competition among limit orders creates narrower spreads and additional depth of book, both of which contribute to a reduction in transaction costs for all investors.
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Harts later writes:
We were surprised that the author implies TD Ameritrade —long known for its high standards of execution quality—would jeopardize its reputation by routing to venues where their clients wouldn’t get the best possible execution.
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Yet TD Ameritrade has done exactly that by selling its order flow to wholesalers, who then trade against TD Ameritrade's retail clients for their own account. Now DOJ has taken an interest, which can't be good for the reputations of either the wholesalers or the discount brokers who sell their order flow to them:
http://www.reuters.com/article/us-usa-stocks-probe-exclusive-idUSKCN0Y11CJ
 
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