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Craig Pirrong is quoted on the spread savings HFT brings over floor trading

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 Targ P., Financial Markets & Regulatory Consultant

 Saturday, July 19, 2014

So do the liquidity benefits of HFT outweigh the risks? Will the regulatory constraints on HFT exert a negative impact on liquidity and available spreads? From the article: "Conservatively, spreads were 25 times higher in the floor market. Even adjusting for the fact that prices in 2011 were almost double than in 2006, we’re talking a 12-fold difference in absolute (rather than percentage) spreads."


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2 comments on article "Craig Pirrong is quoted on the spread savings HFT brings over floor trading"

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 Neil Crammond, trading manager at LDN capital

 Sunday, July 20, 2014



the spreads on the floor were higher BUT carried bigger size and were reliable for a decent period . It too was cheaper to floor trade as scratch rebates were a "locals" best friend .


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 WH Chan, Information Technology and Services Professional

 Sunday, July 20, 2014



I am not sure whether HFT improves liquidity. There are only a large number of open orders (a little bit like spamming in order to 'phish' the market) and most of them do not get executed. Unless HFT attracts more market participants, it does not seem to be additional liquidity.

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