A new paper just published by the Bank for International Settlements has the HFT community applauding and cheering from the tops of their microwave antennas.  The paper, titled “Who Supplies Liquidity, How and When?”, suggests that high frequency traders supply liquidity even in volatile markets.  HFT proponents have been waving this paper around for the past few days as proof that they are actually liquidity providers and not just high-speed, predatory traders who use their latency advantage to pick off less sophisticated and predictable algorithms. Before we get into the findings of the paper, it’s always important to check which dataset was being studied. (more…)

Do you recall the 2014 class-action lawsuit filed by several plaintiffs, including Providence, Rhode Island, against the major stock exchanges and the Barclays Dark pool in the wake of Flash Boys? It had been dismissed by Judge Furman in August 2015 on the grounds that: “Exchanges, as self-regulatory organizations, are “absolutely immune from suit based on their creation of complex order types and provision of proprietary data feeds.” He said Congress has decided that the exchanges are to be regulated by the Securities and Exchange Commission.” With regard to Barclays, Judge Furman ruled that not enough evidence was presented that (more…)