Talk:High-frequency trading

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Index rebalance trades are not HFT[edit]

The article starts by defining HFT as "a type of algorithmic trading characterized by high speeds, high turnover rates, and high order-to-trade ratios that leverages high-frequency financial data". Index rebalance trades require neither high speeds (positions can be put on via the upstairs market and by block trading), nor high turnover (which in HFT usually means <1 second to minutes), nor high order-to-trade ratios (the alpha evolves over days, removing the need for constant repricing of orders), nor are they dependent on high frequency financial data.

Accordingly, I am removing that paragraph from this article. I suspect that the only reason that this issue made it into an article on HFT is that they're both (generically) seen as "bad" behavior . Afekz (talk) 08:08, 6 October 2015 (UTC)

Addition: of the articles referenced in support of the contention that HFT's make index rebalance trades, the Euro ETF one reads, "that by far the largest alpha opportunity for other investors occurs in the last **24-48 hours** before the effective date, when the volatility is typically greatest", and none that I could access mention HFT players as being those who engage in these trades. The most likely index rebalance traders would have been bank prop desks in the old world and hedge funds in the post-Volcker/et cetera world. — Preceding unsigned comment added by Afekz (talkcontribs) 08:15, 6 October 2015 (UTC)

Algo and high-frequency should both have their own page[edit]

Hi there, Why redirect this page to algo trading? Isn't there enough room for other topics in algo trading that are not covered under high-frequency? High-frequency trading seems broad enough to have its own page, no?

"Jump ahead in the queue"[edit]

It may be the definition of flash trading, it is also that of front-running, a practice that is forbidden in Europe since its Market Abuse Directive has been transposed in member-state legislations. Does the SEC approve of front-running?Bmathis (talk) 20:29, 27 May 2010 (UTC)

The definition of "front-running" used in a legal sense (and thus presumably that used by the SEC) relates to a fiduciary relationship between a client and a broker acting as agent, knowledge disclosed in confidence by that client to the broker and the broker using that confidential knowledge to trade ahead of the client to its client's detriment. The behaviours that are often described as "front-running" in the HFT context involves no fiduciary relationship and only the exploitation of public information. Some of that behavior is parasitic and therefore undesirable, but not all (see the the fallacy of the single cause). Matt Levine explains in plain language one of the primary (IMO) sources for much of the observed data at Again IMO, the major issues relate to how the markets are structured (fragmented venues, complex order types, tight coupling between venues and the resultant fragility, the enforcement of regulations - being Reg NMS - which were designed by someone assuming Newtonian rather than relativistic physics, et cetera) and how we make them more robust and restore confidence. I expect that the latter will be done by a combination of changes and education. Afekz (talk) 06:55, 14 October 2015 (UTC) (And see also Hostile attribution bias.)

Lippia (talk) 03:21, 19 March 2010 (UTC)Lippia

I think High Frequency Trading should have it's own page. When the truth about how manipulative it really was finally comes out there will be a lot more data on the subject — Preceding unsigned comment added by Barrie-inspector (talkcontribs) 10:44, 16 September 2013 (UTC)

Possible pro HFT Bias[edit]

A very nice informative article on this hot topic, and im happy the critical sources i added seem to have been accepted, but I still feel this article is maybe a little POV. Granted, all the indepedent studies Im aware off (& I think theres only 2 specifically on HFT not algos) are positive, so we can stress that view. But to me some of the rebutals of critical views are overdone, and maybe we could remove or qualify the clause in the lede that says HFT "contributes to the profitability of the financial sector" which implies it helps the whole sector (a well supported view but still controversal) rather than just saying its a profitable strategy for those who use it. Anyway, just an opinion, will leave it to the main editor(s) to decide. FeydHuxtable (talk) 09:54, 12 September 2010 (UTC)

Without the rebuttals it would be POV, but if something is already refuted then it would be bias not to show that side of the debate, especially if it is backed up by actual research. As for the "contributing to the profitability of the financial sector" any entity in the financial sector that is profitable contributes to the profitability of the financial sector. As for helping the financial sector over all you say yourself it is a well supported view, and as for contributing to the profitability of the financial sector as stated above is really not even controversial. Financestudent (talk) 14:56, 12 September 2010 (UTC)
All correct, but the problem with the phrase is some will read it as implying HFT helps other participants in the same way that say market makers do. A worried investor coming here after reading some of the critical write ups in the financial press might loose respect for our neutrality if they read what seems to them an unequivocal statement in the encyclopedias neutral voice saying HFT makes the sector more profitable for them. Anyway, thanks for creating this great article, we dont have too many on financial topics. FeydHuxtable (talk) 15:54, 12 September 2010 (UTC)
I don't think "contributes to the profitability of the financial sector" is the same thing as makes it more profitable for all participants. Also although market making is one type of activity HFT firms engage in it is they are not limited to that, take arbitrage for example. However I will look at changing that line if it really bothers you or you think it could be misinterpreted, though it may have to wait until I have free time. do you have any suggestions as to alternative content or statements? Also thank you, this article was pretty lacking so I attempted to expand it to the best of my knowledge, citing everything as I went along, and due to the nature of the companies that HFT it is difficult to find any articles other then pure speculation as to what HFT is or how it worked. Despite that I made sure articles for and against it were cited, and even added the criticisms section and organized the articles criticizing it. I expanded algorithmic trading to some degree as well but there was less work needing to be done and there was a fairly substantial article in place prior to me looking at it unlike HFT. My academics are in both Computer Science & Economics so I have a strong interest in contributing to neglected articles of significance in those fields. I also have a strong focus on pure mathematics but the Wikipedia articles on those topics are typically quite complete as it stands. I figured a little research on HFT for the public as it becomes more talked about could go a long way so if anyone gets any use out of it then it was worth the time to contribute. Financestudent (talk) 17:39, 12 September 2010 (UTC)
Cool, i made the change, no worries if you want to revert it. FeydHuxtable (talk) 12:18, 13 September 2010 (UTC)
No need for me to change it, looks good and won't confuse people. Thanks for the contributions to the article. Financestudent (talk) 17:30, 13 September 2010 (UTC)
I would agree with you. I came to this talk page just to say this is a totally biased article, giving the wrong impression of high frequency trading. HFT is securities fraud, and it profits by screwing the ordinary investor.Bcroner (talk) 20:56, 23 January 2016 (UTC)

Recent Developments[edit]

I propose adding a recent developments section. Some HFT firms have recently (today) been fined by FINRA for abusing quote stuffing and I think the important developments in this field should be added to their own section on the page as these things unfold. If no one else is interested in doing it I can add that section as well at a later date. Financestudent (talk) 17:53, 13 September 2010 (UTC)

I would like to apologize and retract that suggested addition as more recent details on the event showed it was one firm and the tactics used were not related to high frequency trading nor did they involve high frequency trading at all. Actually involved manually entered orders in a way that was manipulative toward other market participants including High Frequency Traders.[1] Financestudent (talk) 16:08, 15 September 2010 (UTC)

Volatile markets - Effects section[edit]

The statement that HFTs "have a stabilizing effect in times of volatility" is footnoted with references to financial industry sources. Two of the three footnotes are essentially op-eds from HFT firms themselves; the third is an exchange. Hardly NPOV. They are also all primary sources. This statement should be supported from neutral or secondary sources or deleted.

The statement that "high frequency traders typically cause no market price impact" is footnoted to an op-ed (essentially) and study from an HFT firm itself. Also hardly NPOV. This statement should be supported from neutral or secondary sources or deleted. MarketsGuy (talk) 17:16, 3 November 2010 (UTC)

Primary sources are allowed on wikipedia, they do not need secondary support and wikipedia policy states that primary sources may be used. The material is cited and doesn't need to be removed, thank you for your diligance though. I also removed some "dubious" tags someone put on your cited sources. Financestudent (talk) 14:09, 7 November 2010 (UTC)

Regulators implicated HFT in Flash Crash[edit]

Two statements of the form "regulators implicated HFTs" in the Flash Crash have been flagged as dubious. Support for the statement that regulators implicated HFTs in the Flash Crash comes from the following references:

Lauricella, Tom (October 2, 2010). "How a Trading Algorithm Went Awry". The Wall Street Journal. 

Mehta, Nina (1 Oct 2010). "Automatic Futures Trade Drove May Stock Crash, Report Says". Bloomberg. 

Bowley, Graham (1 Oct 2010). "Lone $4.1 Billion Sale Led to ‘Flash Crash’ in May". The New York Times. 

Spicer, Jonathan (1 Oct 2010). "Single U.S. trade helped spark May's flash crash". Reuters. 

Goldfarb, Zachary (1 Oct 2010). "Report examines May's 'flash crash,' expresses concern over high-speed trading". Washington Post. 

Popper, Nathaniel (1 Oct 2010). "$4.1-billion trade set off Wall Street 'flash crash,' report finds". Los Angeles Times. 

Younglai, Rachelle (5 Oct 2010). "U.S. probes computer algorithms after "flash crash"". Reuters. 

A clarification that "regulators implicated HFTs, among other participants, in the Flash Crash" seems reasonable to me. Anyone else?

MarketsGuy (talk) 17:42, 3 November 2010 (UTC)

I think putting what the secondary and primary sources said specifically is a better clarification in this instance, I removed the dubious tags and put what the articles said. Financestudent (talk) 14:10, 7 November 2010 (UTC)
Your construction - "contributed to volatility" - is fine. I don't see a material difference between that and "contributed" or "implicated" but it accurately reflects the facts. Separately, I believe that if we talk about "Effects" in the introductory text - that HFT adds liquidity in quiet markets, in particular - we should also talk about effects in volatile markets, and that there is evidence they contribute to volatility. Either we should move the whole discussion down in "Effects" or reflect the whole truth in the intro.MarketsGuy (talk) 17:48, 8 November 2010 (UTC)
One more point. If in places we are going to say regulators "claim" HFTs contributed to volatility in the Flash Crash, we will also say the Hendershott study "claims" HFTs add liquidity. Modify one side, modify the other; they're both based on rather exhaustive data analysis. MarketsGuy (talk) 17:57, 8 November 2010 (UTC)
I think additional clarrification on the sources you posted is needed. To quote your sources the conclusion of the research paper you posted:
"The declining costs of technology have led to its widespread adoption throughout financial
industries. The resulting technological change has revolutionized financial markets and the
way financial assets are traded. Many institutions now trade via algorithms, and we study
whether algorithmic trading at the NYSE improves liquidity. In the five years following
decimalization, algorithmic trading has increased, and markets have become more liquid.
To establish causality we use the staggered introduction of autoquoting as an instrumental
variable for algorithmic trading. We demonstrate that increased algorithmic trading lowers
adverse selection and decreases the amount of price discovery that is correlated with trading.
Our results suggest that algorithmic trading lowers the costs of trading and increases the
informativeness of quotes. Surprisingly, the revenues to liquidity suppliers also increase with
algorithmic trading, though this effect appears to be temporary.
We have not studied it here, but it seems likely that algorithmic trading can also improve
linkages between markets, generating positive spillover effects in these other markets. For
example, when computer-driven trading is made easier, stock index futures and underlying
share prices are likely to track each other more closely. Similarly, liquidity and price efficiency
in equity options probably improves as the underlying share price becomes more informative."

>>>>>I didn't post this paper. It's informative; it's also just a "claim."MarketsGuy (talk) 19:29, 10 November 2010 (UTC)
>>>>>Are we in Wonderland? Turns out you posted the paper you say I posted, the Hendershott paper. You posted it on August 25. This is unbelievable. MarketsGuy (talk) 21:43, 10 November 2010 (UTC)

To quote one of the articles you posted:

All this tough talk has spooked high-frequency traders and the exchanges that rely on their liquidity and volumes. They note that HFT was not blamed outright in the SEC-CFTC flash crash report, and argue that its short-term strategies have made trading cheaper and easier for all investors. Richard Balarkas, CEO of Instinet Europe, the Nomura Holdings Inc-owned (8604.T) agency brokerage and alternative venue operator, said winding back the clock is a mistake. "I don't think investors on the whole want to go back to a market where they all pay a tax, usually in the form of a wider spread, to a firm making monopoly profits that will in any case wave a white flag as soon as a stock has a liquidity shock," he said in an interview. "It's crystal clear why the flash crash happened: a lack of buyers, and unthinking selling. It was pure, simple supply and demand within a regulatory regime that the SEC had created."

Financestudent (talk) 18:48, 10 November 2010 (UTC)
>>>>>Reread your quote from Reuters, the reporter is relaying the sentiments of "high-frequency traders" and certainly not relaying the conclusions of the report. Every secondary source I posted concluded the report says HFT contributed to the Crash. MarketsGuy (talk) 19:29, 10 November 2010 (UTC)

Heavy manipulation of fact[edit]

I urge a senior Wiki editor to thoroughly review this article. Unencyclopedic, lauditory statements are being made. The reference I checked which had been used in the second para gave a much more cautious picture, even going so far as to imply there was no proof for some claims.[1]

"Hard data on performance of high-frequency strategies is indeed hard to find. Hedge funds successfully running high-frequency strategies tend to shun the public limelight. Others produce data from questionable sources."

I have questions about the novelty of the entire concept: Certainly as presented by the article. If the point is: When you make trades faster, it's possible to make more money -- that seems obvious. Moreover, computer trading has always been limited by computer and connection speed. This heavy-handed article is still replete with repetitive peacock language. (talk) 10:26, 18 January 2011 (UTC)

Then remove what you consider peacock language and improve the article? Also I'm not sure how the Huffington Post is an unreliable source. Texasholdsem (talk) 05:41, 6 December 2011 (UTC)

I also agree with the above opinion. I am involved in HF trading, but the representation given here is a little bit irresponsible. HF can involve huge drawdowns and losses and the reader should be aware of risks. I have modified a sentence to address this danger. —Preceding unsigned comment added by (talk) 12:31, 9 February 2011 (UTC)

Someone has deleted my corrections. These are irresponsible people trying to take advantage of the gullible. The sentence " As a result, high-frequency trading has been shown to have a potential Sharpe ratio (measure of reward per unit of risk) thousands of times higher than the traditional buy-and-hold strategies" is TOTALLY RIDICULOUS, false, and actually opposite to the thruth. "thousands of times" ? who is the fraud who has written such a nonsense sentence. Please, go steal somewhere else and do not contaminate wikipedia with such nonsense. —Preceding unsigned comment added by (talk) 11:55, 12 March 2011 (UTC)

I find it interesting that one IP stated "I am involved in HF trading, but the representation given here is a little bit irresponsible." Then in the next edit stated "Please, go steal somewhere else" I'm guessing to people who either support or are involved in high frequency trading? But didn't he just claim that was him? Very confusing rant. Texasholdsem (talk) 05:41, 6 December 2011 (UTC)

Merge suggested[edit]

I have suggested that this article be merged with Algorithmic Trading, as H-FT can be considered a form of algorithmic trading. Perhaps during the merge we can work out the NPOV issues. --Be gottlieb (talk) 20:32, 24 February 2011 (UTC)

I agree there are NPOV issues here. But on the subject of whether to merge, while HFT is certainly a subset of algorithmic trading, it is an important one and deserving of its own page. The term is widely known in the industry and is becoming known to the public at large, is a significant branch of algorithmic trading with relatively unique group characteristics, and in many instances has very distinct sets of - and, at times, opposing sets of - practitioners, critics, and regulatory implications. MarketsGuy (talk) 20:06, 12 July 2011 (UTC)

March 3, 2011 edits by MarketsGuy[edit]

Reverted to "One financial industry source claims algorithmic trading..." because the footnote is, in fact, to a financial industry source, a well-known HFT firm, and it seems important to let the reader know the source for these claims has a POV. Further in the paragraph I revert a change to indicate the Hendershott study found benefits in a stable period in the market. Hendershott himself says so, and he also notes the results may not apply to volatile markets, and in particular that firms could simply pull out in a volatile market. I also note that, as Hendershott warns, this in fact happened in the Flash Crash in the following sentence. MarketsGuy (talk) 20:32, 3 March 2011 (UTC)

Many minor issues[edit]

I have a whole pile of issues with this piece, and if anyone objects to me putting up sourced corrections let me know:

1) It says "programs analyze market data", nowadays some is done in hardware to go faster.

2)"High-frequency traders compete on a basis of speed", true but incomplete since they also compete by doing better trades and things like reducing the impact of their trades.

3) "compete with ...not long-term investors" , that's arguable since they extract value that might otherwise fall into the laps of those with longer holding periods.

4) "High frequency trading firms do not employ significant leverage, do not accumulate positions, " some do both

5) The next section on benefits needs some balance so we can have NPOV, I don't think it is currently very POV, but we can do better.

6) "High-frequency trading has taken place at least since 1999" I first got involved in this stuff long before 1999, but of course it depends upon how high frequency you have to get before if counts as "high". I think we need a definition, of "high". I propose trades that are executed faster than can be done by an unaided human, I can get references for that, but if anyone has a better idea I'm open.

7) "High-frequency trading is quantitative trading" Some is in effect technical analysis, which is a different thing.

8) "Most high-frequency trading strategies fall within one of four groups of trading strategies", not convinced by 'four' and we ought to have some more of the common ones, especiallyt things like market microstructure, signal processing etc.

9)"Since all quote and volume information is public, such strategies are fully compliant with all the applicable laws.", not really as true as you might think, I'd have to work to get rid of original research on that issue, but it is there.

10)"Spending on computers and software in the financial industry increased to $26.4 billion in 2005" I can get a better more recent number.

11) The 'controversy' section does not seem to have an NPOV, not heavily but it's unbalanced.

However, even though I can find many little faults which we can and should fix, I do not see a case for the label of "misleading" that someone has stuck on it DominicConnor (talk) 15:19, 29 March 2011 (UTC)

Pro Bias indeed[edit]

I also think there is overall a feeling of a pro HFT bias, for instance in the style:

  • "Despite studies reporting positive findings about high frequency trading (...) high frequency trading is the subject of increased debate;
  • "This debate has been fueled"

both give the impression that this debate is inappropriate and unjustified, which seems odd.

The article seems to be written from a finance professional perspective for other finance professionals, who overall think HFT is "good". I think these judgments should all be gathered in one paragraph but not appear spread also in the beginning.

Additionally, the Flash-crash controversy appears several times in different places.

The different uses of HFT by market makers on the one side and by investors on the other side (if this is correct at all?) should maybe emphasized.

I am afraid I cannot contribute directly as I do lack expertise. Thanks anyway for this article, even with these shortcomings! — Preceding unsigned comment added by Wikidss (talkcontribs) 14:12, 25 May 2011 (UTC)

Not only is the wording of the above quoted portions slanted, but their respective citations are also biased. One of them is the formal response from the CEO of Tradeworx begging the SEC to lift a ban on HFT, another is a loosely related general article about HFT which makes no authoritative claims, one is an editorial by Cameron Smith from Quantlab Financial, and one more is an article on Huffington Post which compares HFT to video games, and badly at that. This is very clearly written by someone at a financial firm who is trying to cover the idea of regulating HFT with FUD. -- (talk) 04:50, 25 September 2011 (UTC)

Summing things up[edit]

I don't know much about HFT, and I came here to learn about it, but frankly the article was not very helpful. Having read the article and the talk page, I think there are two reasons.

  1. To a non-specialist with no particular perspective on things, the article seems heavily slanted towards pro-HFT. Reading the talk page, it seems that many or most of the primary sources are authored by firms that engage in HFT, or have an interest in HFT. That seems problematic, and someone with a background might try to find more neutral sourcing. It may be that HFT is precisely as good as the article makes it out to be (for example, the entry for penicillin doesn't need to pretend that it wasn't a positive development), but it would be good to find sources to say so who aren't in the HFT business.
  2. The controversy section seems more devoted to rebutting criticism than explaining the controversy. If controversy exists, then it should be explained. If there are simple rebuttals and there's a consensus that those rebuttals are correct (again, a consensus beyond firms that engage in HFT), that might go in a “response to criticism” section below. But stuffing a controversy section with rebuttals is unhelpful and seems defensive, which erodes the article's credibility.

I really do hope someone with expertise and no particular axe to grind can clean this article up. (talk) 07:07, 20 August 2011 (UTC)

Effects on long-term investors[edit]

I have read this informative article and the discussion above. There is a lot of attention paid to market volatility and, like some others here, I feel the critics of HFT seem to be quoted so as they may be rebutted. However, I am more concerned about another aspect which has been raised on this talk page somewhat in passing but seems not to be in the article at all: the effects of HFT on the returns for long-term investors (so having an adverse influence on long-term investment). This seems to me to be very important if market capital comes almost entirely from these sources, with HFT traders not holding significant portfolios. (Apologies for my unsophisticated wording.) A NYT article quoted for other purposes says

"This [HFT] is where all the money is getting made,” said William H. Donaldson, former chairman and chief executive of the New York Stock Exchange and today an adviser to a big hedge fund. "If an individual investor doesn’t have the means to keep up, they’re at a huge disadvantage.”

By "individual" I suspect he does not solely mean "man in the street" but also the pensions funds and the like who must maintain portfolios. Are these investors losing value significantly (or even massively)? The references in support of "without impacting long term investors" seems to me to relate to HFT individual trades not competing. The references (at least one of which is highly partisan) also argue HFT increases liquidity and decreases trading costs. But do they say that value is not removed from long-term investors? I think the article should address the matter even if there is no very clear answer. Sadly, it is beyond me! Thincat (talk) 11:32, 26 September 2011 (UTC)

See: Market maker. These institutions fill a niche without ever competing with a regular investors, or even most institutional investors, because they are making their money from spreads like market makers always have. HFT makes spreads lower which is how trading costs get lowered. I suppose the people who "lose out" are slower market makers, but investors win because the old market maker monopoly is broken so trading, buying, and selling are all cheaper. Texasholdsem (talk) 05:32, 6 December 2011 (UTC)

Algorithmic and HFT implicated[edit]

I reverted a change that moved the paragraph

Algorithmic and high-frequency trading were both found to have contributed to volatility on the May 6, 2010 Flash Crash, when high-frequency liquidity providers were in fact found to have withdrawn from the market.[2][3][4][5][6][7][8][9] A July, 2011 report by the International Organization of Securities Commissions (IOSCO), an international body of securities regulators, concluded that while "algorithms and HFT technology have been used by market participants to manage their trading and risk, their usage was also clearly a contributing factor in the flash crash event of May 6, 2010."[10][11]
  1. ^ [url=]
  2. ^ Cite error: The named reference WSJ1 was invoked but never defined (see the help page).
  3. ^ Cite error: The named reference bloomberg1 was invoked but never defined (see the help page).
  4. ^ Cite error: The named reference NYT1 was invoked but never defined (see the help page).
  5. ^ Cite error: The named reference reuters1 was invoked but never defined (see the help page).
  6. ^ Cite error: The named reference wapo1 was invoked but never defined (see the help page).
  7. ^ Cite error: The named reference popper was invoked but never defined (see the help page).
  8. ^ Cite error: The named reference younglai was invoked but never defined (see the help page).
  9. ^ Cite error: The named reference reuters2 was invoked but never defined (see the help page).
  10. ^ Cite error: The named reference iosco was invoked but never defined (see the help page).
  11. ^ Huw Jones (July 7, 2011). "Ultra fast trading needs curbs -global regulators". Reuters. Retrieved July 12, 2011. 

considerably down the page to the "Controversy" section. This issue should appear in the introduction to the topic because it is very much in the news. Also, this paragraph belongs in the introduction for completeness and balance. MarketsGuy (talk) 18:27, 8 December 2011 (UTC)

Regarding this paragraph, isn't it arguable that it was the lack of HFT that contributed to the flash crash, as many HFT market participants withdrew from trading during the crash? DarkCow (talk) 14:32, 26 July 2012 (UTC)

WikiProject AI[edit]

If you're in WikiProject Artificial Intelligence, do you think this article might be of interest to the project? (talk) 23:23, 1 March 2012 (UTC)

Not at the moment. TheSoundAndTheFury (talk) 02:01, 18 October 2012 (UTC)

Made series of edits[edit]

Made a series of edits, and think these addressed some POV issues raised a while ago in comments above. Stephanwehner (talk) 03:55, 25 March 2012 (UTC)

no discussion of millions of cancelled orders ?[edit]

my understanding is HFT also puts in lots of test orders and then cancels them. — Preceding unsigned comment added by (talk) 04:29, 24 August 2013 (UTC)

Dubious claim about the Rothschilds and strong pro-HFT bias[edit]

Profiting from speed advantages and new technology in the market is as old as trading itself.[22] In the 17th century, the Rothschilds were able to arbitrage prices of the same security across country borders by using carrier pigeons to relay information before their competitors.[citation needed] Similarly, human runners, horse-ridden carriers, ticker tape machines, and ultimately computers all represented the evolution of financial technology aimed at profiting via enhanced speed.[23] HFT modernizes this concept using the latest communications and computing technology.

This whole paragraph, especially in context as the first paragraph about HFT history, shows too much bias. Also, the paragraph's 2 citations are from the same source, which is a legal paper that I can't read (academic paywall). The abstract that is available to me does not support the broader claims made by the paragraph—specifically the claim that HFT is merely a speed advantage like carrier pigeons or telegraph-based tickers. Finally, the paragraph claims that the Rothschild family was using speed-of-information-based arbitrage the century before Mayer Rothschild was born. Taken together, it feels like poisoning the well, and an appeal to authority (an iconic traditional banking family), possibly trying to head off argument about whether HFT has market precedence or is good for other traders and the overall market. At best, it is a weak introduction to HFT's history. The history section will read well enough without it.

--Gabe (talk) 02:26, 5 April 2014 (UTC)

The cited article is not behind a paywall. Click on "Download This Paper", then select a source for download. But your other points are valid. I could not find any confirmations to the statements made in the removed paragraphs. Enivid (talk) 09:04, 5 April 2014 (UTC)

Aite Group Survey as bad source for 73% of all equity trading, User:FuturisticCyberSpace[edit]

User:FuturisticCyberSpace (he edited only this article) made a big change at august 15, 2010 in History section: diff to oldid 379102991 and as part of the change added this:

In the U.S., high-frequency trading firms represent 2% of the approximately 20,000 firms operating today, but account for 73% of all equity trading volume.<ref>Aite Group Survey</ref>

There is no exact link for Aite Group Survey and there is no enough information to locate the survey now (via The same nonexact ref was later duplcated in Algorithmic_trading#High-frequency_trading. There are even some critique of the wikipedia's data in external blogs (2010):

That’s why, when Wikipedia quotes Aite Group as saying that high frequency trading firms account for 73% of all US equity trading volume in 2009, they’re wrong. OK, as usual, Wikipedia have got it wrong as, according to Reuters who should know, high-speed trading “accounts for about 60 percent of U.S. equity volume”. Bloomberg agree, quoting TABB Group who state that HFT accounts for 61% of equities volume, up from 35% in 2007.

I think, we should delete this 73% per sources, listed in the "thefinanser" blog. And we can't use any other source for "73%" from the papers published after august 15 2010 before checking for WP:CIRCULAR (I see several pdfs/papers which just reused this 73% from wikipedia). `a5b (talk) 04:19, 2 January 2015 (UTC)


Recently this passage was deleted:

It has been argued that a core incentive in much of the technological development behind high frequency trading is essentially front running, in which the varying delays in the propagation of offers is taken advantage of by those who have earlier access to information.

It's usually reasonable to delete uncited passages, but this strikes me as a not particularly controversial observation. Does anyone have a reason to believe that it isn't true? EllenCT (talk) 04:38, 20 January 2015 (UTC)

@EllenCT: Anything starting out "It has been argued" needs to state by whom and cite it. The sentence contains an acceptable and uncontroversial definition of front running, but the claim that this is the "core incentive" in technological development is debatable, and requires a reference to a reliable source.
There are many incentives to technological development in high-frequency trading. I would say that arbitrage has been a stronger incentive over the past several decades, with front running being only more recently exploited. Removing that sentence was a good call, in my opinion. ~Amatulić (talk) 05:27, 21 January 2015 (UTC)
But arbitrage happens all the time, and has for centuries. I agree it's a strong motivation behind algorithmic trading, but races to be the first to gain from arbitrage don't need to be high frequency so much as high speed. EllenCT (talk) 17:40, 24 January 2015 (UTC)

Content removal by Kristina451[edit]

User:Kristina451 has removed a lot of content on dubious premises while also making some improvement. I would not want to edit-war, but removal of Chicago Fed references as link spam or disqualifying a research paper that was made on a grant is not contributing to the overall quality of the article. Any thoughts on the removal/restoration of those sections is welcome. Enivid (talk) 08:55, 20 February 2015 (UTC)

What I referred to as link spam were not references. These six links were cluttering up the external links and WP:EL says they should be kept minimal. The article had 15 external links before I consolidated them. There are countless papers about high-frequency trading. I don't see why the one funded by Citadel LLC to improve the public image of HFT warrants inclusion. Citadel is an order internalizer and among the most controversial HFT firms. Kristina451 (talk) 13:22, 20 February 2015 (UTC)

External links modified[edit]

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