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Ted Kellogg Benedicte Gravrand, Opalesque Geneva:
Boston has a history of professional stock picking and attracts many talented people; but stock-pickers have had to compete with computers doing high frequency trading in recent years. And not everyone likes competing with boxes.
High frequency trading (HFT), accounts for around 53% of all transactions in the U.S. stock market, up from just 26% in 2006, and it has reaped $12.9bn in profits over the last two years, according to the Tabb Group. It is also rapidly growing in popularity in Europe and Asia. Some of the highest volume high-frequency traders include Knight Capital Group, Getco, Citadel, and Goldman Sachs.
At the recent Opalesque Boston Roundtable, participants argued about whether HFT was a curse or beneficial to markets and fund managers. Some interesting points came out of that discussion.
Major source of risk to capital market stability
Ted Kellogg, manager of the GRT Concentric fund, a long/short fund, believes that HFT and other strategies designed to front-run other investors are a "major source of risk to capital market stability."
Critics have indeed been accusing some HFT firms ...................... To view our full article Click here
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