The HFT Pirates And Their Academic Friends

11

April, 2012

Bloomberg View published an op-ed today titled  “High-Speed Trading Is Progress, Not Piracy” written by Professor Bernard Donefer of Baruch College. As expected, this is the typical HFT defense piece (why does Fred Mishkin come to mind every time we read an academic piece like this). We’ll save you the trouble of reading it and summarize Prof. Donefer’s main points:

- Criticism of HFT is overblown
- Information-timing asymmetries have always existed
- Automated market makers are liquidity providers
- There is some bad HFT (momentum ignition, layering) and this needs to be

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