The ICI has reported that US institutional domestic equity volume has fallen by 27% year over year. Yet market volumes have increased by 16%. So, I am thinking about a few things: First of all, obviously this means that HFT volume has skyrocketed even more this year (duh). Second, we hear continually how HFT lowers trading costs, yet we are starting to see studies in the past month that say that in the past year trading costs have increased.
So, more HFT volume AND trading costs increase. Lucy, you got some ‘splaining to do…..