

High-Speed Traders Profit at Expense of Ordinary Investors, a Study Says - HockeyPlayer
http://www.nytimes.com/2012/12/04/business/high-speed-trades-hurt-investors-a-study-says.html?hp&pagewanted=all&_r=0

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HockeyPlayer
Several interesting points here:

\+ there are different types of high-frequency traders, some of which are more
aggressive in initiating trades and some of which are passive, simply taking
the other side of existing offers in the market.

\+ that more aggressive traders accounted for the largest share of trading
volume and made the biggest profits. The most aggressive scored an average
profit of $1.92 for every futures contract they traded with big institutional
investors, and made an average $3.49 with a smaller, retail investor.

\+ Passive traders, on the other hand, saw a small loss on each contract
traded with institutional investors, but they made a bigger profit against
retail investors, of $5.05 a contract.

\+ The average aggressive high-speed trader made a daily profit of $45,267 in
a month in 2010 analyzed by the study.

\+ “We’re not estimating,” he [the study author] said. “Our data is
excellent.”

