Big Mike 

I think the argument of HFT providing liquidity is interesting. From my understanding, HFT's do not trade against each other. They trade primarily only against retail.

They do trade against each other as well. The people taking the biggest advantage of retailers are the internalizing brokers that either have their own HFT arm or are selling that flow to a HFT. Interactive Brokers is a prime example. Their HFT arm is probably raping their customer orders for pennies.

I think the actual number of strategies out there that try and take advantage of retailers (outside of internalization) is very very small.

As far as the decline in volume. I think that may just be coincidence that has more to do with the overall economy.

Hi @lookOutBelow,

I was quite intrigued and interested about your idea that IB may be playing against its own retail clients (I am one of them). Do you have further reference or reading to go deeper into this topic?

Thanks in advance,

Nicolas

Nicolas11 

Hi @lookOutBelow, I was quite intrigued and interested about your idea that IB may be playing against its own retail clients (I am one of them). Do you have further reference or reading to go deeper into this topic? Thanks in advance, Nicolas

I don't. But do a search for Timber Hill. This is IB's Market Making arm. They are basically a huge internalizing HFT for IB customers.

liquidcci 

This will make you think. As much as I dislike HFT create wild swings and flash crashes i don't want to go back to this. Picture is worth a thousand words. See link below Remember the non HFT days? |

Would have loved to work in the pit in the old days, and I'm jealous of guys like @tigertrader who got to try it.