rigging the market

HFT funds aren't trading as much anymore, because there aren't enough humans to trade with. Algobots just quote each other prices. As Salmon points out, there were 280,000 quotes in a 17-minute span to trade the EFZ back in September 2012. But there were zero actual trades during that time. It's no surprise then that HFT funds are desperate for any kind of competitive advantage. So, like Red Auerbach suggested, they cheat. Now, what they do is strictly legal, but that doesn't make the game any less rigged. The Wall Street Journal reports that HFT funds buy early access to data from third-party distributors—everything from corporate earnings to the Philadelphia Fed's manufacturing survey. They're getting the numbers just fractions of a second early, but that's more than enough in the world of high-frequency trading. - High-Speed Trading Isn't About Efficiency—It's About Cheating