Funny Bit About High Frequency Trading

A few weeks back I read an HBR blog which talked about the difference between thick value and thin value. The author theorized that the US was becoming too reliant on thin value. One example of thin value is something called High Frequency Trading. It basically makes money on the spread between the bid and the ask of the equity. The problem is that because its ultra fast it puts them at an advantage to realize what the bid and ask are. The other advantage is that these traders are usually market makers as well. This means that without their volume of deals there probably isn’t any market to trade in. Seems like a sucker game to me.

Anyway, here is Comedy Central bit on it. It isn’t completely accurate, but funny none the less.