Don’t cry for “the little guy on Wall Street”
Reuters.com - over 3 years
This happens every time something goes wrong on the stock market — every time there’s a flash crash, or a high-frequency trading firm blows up, or the Nasdaq is forced to go dark for three hours. A bunch of editors who don’t really know anything about HFT ask for stories about it, and they all want the same thing: a tale of how a small group of high-speed trading shops, armed with state-of-the-art computers, are using their artificial information advantage, and their lightning-fast speed, to extract enormous rents from the little guy.
The result is a spate of stories like Rob Curran’s latest piece for Fortune, which appears under the headline “Make $377,000 trading Apple in one day”. Of course, there are lots of ways to do that: one way would be to buy about 77,000 shares of Apple, for $37.7 million, and then watch them rise by 1%. But Curran reckons he’s found a better way — indeed, an easy profit which involves no risk at all. What’s more, this method is particularly evil, since ap