There are various kinds of HFTs, and some will be ganked, but others are generally indistinguishable from trading that the markets believe are healthy (I'm familiar with more than one "buy-side-only" HFT firms, for example, who would still be profitable through transaction taxes and "order must stay in the market at least 5 seconds" rules which had been contemplated).
Though, I'd be surprised if any law gets passed and enforced against HFT as long as Goldman is HFTing. They have too much klaut to make that happen. Once they stop profiting from HFT - everything goes
Well for example, there is a proposed transaction tax by some politician in the USA, targeting HFT processes. It wouldn't be painful for joe buying his mutual fund EFTs every month, but it will be for HFTs.
It's interesting you posted this, then about a day afterwards Luminex was announced [1] [2]. I'm not familiar with the term of art "latency stingray", and it doesn't turn up in a Google, can you please point me to a page about it?
I'm confused about your assertion "a lot of players high up..."; GS is quite high up there, and they're very active in HFT, as are many others, so that seems at odds with your assertion that powerful players are "tired of HFTs" (unless they are playing only to essentially defend their more strategic interests). Any more powerful than them, and I'm thinking executive political participants, but I'm hard-pressed to think of any of them who could actually put something actionable into place would care about HFTs. Unless the volatility induced by HFTs during certain market scenarios is presenting a problematic obstacle for achieving specific nation-state strategic goals, I can't see how national-level political actors would involve themselves with clamping down on HFT activity?
Anyways, fascinating food for thought, thanks for bringing this up.
Having read Flash Boys it's pretty clear that HFT is just legalized theft. The vested interests can keep it going for a while but it's not viable in the long term.
a) With Legal rules made against a majority of HFT processes (edited - pathways is probably a weird weft for HN)
b) With aggressive >contra algos employed to prevent certain HFT processes working
c) With bandwidth / latency stingrays employed
It's happening as we speak: a lot of players high up in the game are tired of HFTs.
Note: this is all rumor, and plausible deniability has been engaged.
You didn't hear it here, but it's gonna happen.