As has been pointed out a few times in connection with this incident, Knight is largely a market-maker (not an HFT firm): Knight keeps open quotes on both buy and sell sides of transactions at all times and provides liquidity. Their strategy to make money is the "spread" -- they price the buy a couple of cents lower than the sell and on average they end up buying a couple cents lower than selling.
They are part of the infrastructure of the major markets; a company listing on NASDAQ or NYSE is required by the market to choose at least one market-maker who will be designated to always keep open buy and sell orders on the books.
As it happens, Knight does its market-making through computers; this replaces sweaty men who would stand in the "pit" of the trading floor and trade by waving fingers at each other (including, occasionally, the middle one). It looks like HFT in that computers trade quickly, but it is intended to be a liquidity-providing service to the market: there is always somebody willing to buy or sell anytime the market is open.
(In contrast, HFT does not require always-open buy and sell quotes.)
Yeah, "liquidity" is the standard bullshit distraction trotted out every time HFT is discussed here. Strangely enough, we've got "yummyfajitas" defending it again, which maybe, just maybe, might have something to do with the fact that he works in HFT.
As for liquidity, since the bots only make trades with the goal of shaving off tiny little slivers of profit on millions of trades, why and how would one of those sweaty guys ever buy anything from them? Even if one wanted to, the opportunity to buy might pass in a couple of microseconds.
All in all, working in HFT or even the financial "industry" at large, is complete bullshit. No self-respecting, decent human being should do it. No matter how you look at it, your mission there is to help world-raping scumbag bankers and the like make more money. They certainly don't need it.
Finance still, though? I bet it's difficult to let go of the fat paychecks.
> As for your other questions, I suggest you go read my blog posts on the topic. They answer all your factual questions.
Ah yes. I was just giddy with delight when you used Futurama character names in those examples. How could I not love everything HFT represents after that?
> Your guesses as to my personality type and employment situation are just as wrong as your speculation about the nature of HFT.
That's easy for you to say. We're both human though. Humans are above all selfish, and have a hard time letting go of easy money.
So who knows, if I were some kind of math wizard living in the US, I might have ended up working for a bunch of sociopaths too. It's possible I'd be here on HN, rationalizing and defending HFT and blowing smoke up people's asses with cutesy link-bait-titled posts about it.
I didn't actually say anything about your personality type though.
We shouldn't even bother, but perhaps you'd care to point ouf my mistakes in describing "the nature" of HFT?
They are part of the infrastructure of the major markets; a company listing on NASDAQ or NYSE is required by the market to choose at least one market-maker who will be designated to always keep open buy and sell orders on the books.
As it happens, Knight does its market-making through computers; this replaces sweaty men who would stand in the "pit" of the trading floor and trade by waving fingers at each other (including, occasionally, the middle one). It looks like HFT in that computers trade quickly, but it is intended to be a liquidity-providing service to the market: there is always somebody willing to buy or sell anytime the market is open.
(In contrast, HFT does not require always-open buy and sell quotes.)