I always thought that high frequency trading was inherently, well, bullshit because it doesn't add anything to a business.
In theory when you invest in a company they will use your funds to expand operations by purchasing physical capital (i.e. real estate, machinery, etc) and/or labor of more quality or quantity.
With HFT (High Frequency Trade) those funds may be invested for less than a second. I think anyone with sense can see that these rapid swings can make it very difficult to plan out business expenditures. It can also make it difficult to compete for non-HFT investors, as HFT trades will always be faster.
It leads to destabilizing effects on the broader economy and exacerbated wealth inequality, as this is very much a rich man's advantage.
http://www.zerohedge.com/news/2014-03-31/market-rigged-michael-lewis-explains-how-hfts-screw-investors-every-day
I didn't get to watch the 60 minutes episode they refer to but hope to watch these clips when I have better access to data.
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