High frequency trading
On April 11, Alan Kohler wrote what I thought was a very interesting article in Business Spectator about HFT (High frequency trading is cuckoo). As written, it rather put the wind up me because I thought that the ASX was preferring HFT traders over ordinary clients and ordinary brokers. In effect, the practice is a form of 'front running’, which I thought was illegal. Further, as I understood it, the practice seemed to permit HFT traders to 'double short’ if they so choose – which is not all that attractive for ordinary shareholders in the current shaky market. I was also concerned if special arrangements had been made in respect of ASX shares – in other words, are ASX shares in or out of the deal? You can imagine my surprise when I read Fil Mackay's piece in Eureka on May 7 saying that we don't need to worry yet because HFT is not going on in Australia! Who’s right – Alan or Fil, or are they both right and I've simply misunderstood it all?
– T Holt