The last 2 days of buzz about Michael Lewis’s “expose” of high frequency trading, Flash Boys, has led to a lot of articles and debates. At my house, we’ve been talking about some of the issues for a while now. In the last 18 months as I’ve learned a little about HFT — very casually, mind you — I’ve started saying that I hope it gets regulated out of existence. But let’s try a little thought exercise.
Someone who loves to play devil’s advocate asked me what the conceptual difference is between what HFT-ers are doing and what telegraphs enabled banks and the owners of the telegraph lines to do: use their privileged position to obtain and act on financial information sooner than the public.
I do not have a pat answer to that question. The best I’ve got so far is something like, “Even if it has always happened, it’s still wrong.” I’m curious to know others’ thoughts.