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High-Speed Traders Profit at Expense of Ordinary Investors, a Study Says (nytimes.com)
2 points by HockeyPlayer on Dec 5, 2012 | hide | past | favorite | 1 comment



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.”




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