Sounds as if the HFTs are initiating trades but not completing them.
In network terms, it's a SYN attack -- you're opening a port but not connecting to it, or dropping it.
A tax on uncompleted transactions might also help here. I'd say Soros's suggestion also has merits, though perhaps the incomplete transaction tax could be set somewhat higher.
Neither would have to be large to make HFT grossly unprofitable.
>A tax on uncompleted transactions might also help here.
I agree. My understanding is that regulations in my own country (Canada) are being put in place to mitigate such problems. I just think it is important to maintain the distinction between high frequency trading and high frequency quoting. They should not be condemned as one entity.
In network terms, it's a SYN attack -- you're opening a port but not connecting to it, or dropping it.
A tax on uncompleted transactions might also help here. I'd say Soros's suggestion also has merits, though perhaps the incomplete transaction tax could be set somewhat higher.
Neither would have to be large to make HFT grossly unprofitable.