Opinions on high-frequency trading still run the gamut. On one end of the spectrum we find individuals such as Mark Cuban, a successful Dallas-based businessman, who recently proclaimed that he is afraid of high-frequency traders. Mr. Cuban’s fears are based on his belief that high-frequency traders are nothing more than “hackers,” seeking to game the markets and take unfair advantage of systems and investors.
On the other extreme are employers in the financial services industry. Just open the “Jobs” page in “Money and Investment” section in the Wall Street Journal, and all you will find are job postings seeking talent for high-frequency trading roles. The advertising employers are the whitest shoe investment banks like Morgan Stanley. These careful firms invest resources only into something they deem worthwhile and legitimate. The extent of their hiring (the only hiring advertised in the Wall Street Journal) implies that the industry is enormously profitable and here to stay.
So, how can Mr. Cuban and Morgan Stanley have such divergent views of the high-frequency world?