Paul Wilmott rips the HFT boys

29

June, 2010

Paul Wilmott has an excellent blog post out on how, among other things,  HFT has distorted the price/value relationship.  Here are some excerpts:

“I am concerned about High-frequency Trading (HFT) for two main reasons: Reduction of the relationship between value and price; Potential for positive feedback….Positive feedback is when an up begets a buy, which causes the stock to rise again, causing another buy, etc. etc. And when a fall begets a sell, causing another fall, and further selling, and…”

“Whenever you have a bandwagon, such as HFT now is, then you have the potential for systemic risk and feedback. Remember the

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