I think HFT can actually serve to smooth out inefficiencies in the market.
That being said, it can, and almost certainly has, been abused. I am thinking mostly of 'quote stuffing'.
Also, there is the potential for a feedback loop between trading systems that can send prices to levels that are way undervalued or overvalued. I think overall these fears are probably way overblown but I suppose they do exist. Basically, I think it HFT fine but I hope the SEC is catching up technologically to prevent both catastrophic situations in time and bad actors from taking advantage of structural exploits.
That being said, it can, and almost certainly has, been abused. I am thinking mostly of 'quote stuffing'.
Also, there is the potential for a feedback loop between trading systems that can send prices to levels that are way undervalued or overvalued. I think overall these fears are probably way overblown but I suppose they do exist. Basically, I think it HFT fine but I hope the SEC is catching up technologically to prevent both catastrophic situations in time and bad actors from taking advantage of structural exploits.