For Some, High Frequency Trading Breeds Unfairness

20100127084812clinical-data-operation-landing-430x3236The stock market is rigged to help the rich and powerful who have access to high frequency trading algorithms– and regulators are doing little to help individual investors. The only way to avoid this hazard is not to trade a lot.

The traditional model of the stock market is one where rational investors aim for long-term profit by carefully assessing equities based on publicly available information. That model is no longer valid. In fact, the majority of trades are made in the matter of nanoseconds by supercomputers with no human input at all.

High-frequency trading (HFT) is out of control. The TABB Group estimates that HFT accounts for 73% of all trades on American stock exchanges.

HFT gives an unfair advantage to those with the means to use it, creates volatility, distorts stock prices and loosens the relationship between how well a company is managed and the price of its stock.

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