High Frequency Trading: Progress or Problem?
CBOE Views on High Frequency Trading:
- Generally speaking, the evolution of high frequency trading has helped limit spreads and increase market liquidity -- efficiencies that benefit all market participants.
- HFT does not conflict with or disadvantage retail investors, who are typically making prudent, long-term investing decisions, rather than split-second investing decisions.
- Trading technology is a competitive factor, with the bar constantly being raised in terms of speed and efficiency.
- Every new market innovation needs to be monitored for potential abuse, but it's short-sighted - and anti-competitive - to simply regulate technology to the lowest common denominator.
- Attempting to limit or somehow "slow down" high frequency traders is a slippery slope. Before taking regulatory action, it is important that regulators have a clear picture of what they are trying to accomplish - or prevent - if they were to limit or "slow down" HFT.
- U.S. regulated markets must continue to evolve and innovate in order to compete globally. The pace of technological innovation is such that all market participants, including regulators, will always be challenged to keep pace.