Why Warren Buffett is Wrong about High-Frequency Trading
Don't think he is wrong. He simply has what is worth more than HFT : a lot of money and some common sense. You don't need HFT then
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High-frequency trading (HFT) is once again making headlines. State securities regulators Tuesday urged Congress to investigate the practice, saying in a report it can put retail investors at a disadvantage, since they don’t have access to the same information and buy and sell at less favorable prices.
HFT refers to the trading that happens at the millisecond and cannot be conducted manually by a human, requiring electronic algorithmic trading.
Earlier this week in a CNBC interview, the Oracle of Omaha weighed in on the issue when asked if HFT hurts the main street investor. According to Barron’s, he said it doesn’t make a difference if you own stocks long-term, and that while real-time quotes are good, people have made them a bad thing by being swayed by what the market tells them at any moment.
Eric Hunsader, founder of Nanex which monitors whole market data and watches HFT shenanigans go down in real time, tells The Daily Ticker Buffett is dead wrong.
Hunsader compares HFT to pick-pocketing. You may not be worried about it when you’re walking around the streets of New York, until you’re a victim.
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