I read an article about High Frequency Trading on Technology Review:

"High-frequency traders are making money by delivering a service: liquidity. In today's highly decentralized market, defenders say, their systems are simply the most efficient way to match buyers and sellers".

What happens if "they" shut the machines off and pull the bids — or throw the big knife switch to "bias = sell"?Makes me think about that scene in "Trading Places" where the Dukes scream "turn those machines back on!"

Dan Costin writes:

They're users of liquidity, not creators of it. Know of any less than liquid stocks that a high frequency trader would get involved with? The stocks they play with are already plenty liquid.

Jeff Sasmor replies:

200+ MM shares / day in C where on many days the price bounces up and down by 1 cent for minutes or hours (aside from the open) is creating liquidity? If the HFT guys aren't churning C then who is?


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