1. From what I've heard, all large organizations need to trade with HFT strategies in mind. (Is this wrong?) So if Mary and Joe own index funds or mutual funds, then they are competing with active trading strategies. It is basically a tax.
2. If HFTraders are collectively making money, and presumably they must be, that money must be coming from somewhere. If, for example, the stock market rises 50%, via some sequence of gyrations, then there is only a fixed gain to be divided up. Maybe HFT increases the size of the pie, but that feels like mostly a higher-order effect.
That's wrong in the sense that it conflates trading strategies with HFT. It has always been a technical challenge to buy or sell large blocks; it is in fact one of the fundamental basic challenges.
The money HFTs collect tends to come from the bid/ask spread. It's money that was already being taxed out of trades, but now robots are competing for it.
2. If HFTraders are collectively making money, and presumably they must be, that money must be coming from somewhere. If, for example, the stock market rises 50%, via some sequence of gyrations, then there is only a fixed gain to be divided up. Maybe HFT increases the size of the pie, but that feels like mostly a higher-order effect.
Am I wrong?