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Disputes over HFT Near An End

According to a professor of finance at the University of Maryland, the sort of intense debates the financial/regulatory world has had in recent years over "high frequency trading" and its consequences have become, or shortly will become obsolete.

It isn't that the opponents of HFT haven't had a point. The meta-point though is, if I understand professor Albert Kyle, that the valid point they (we) have been making involves disparities between some traders and others based on the difference between those that have the latest gee-whiz technology and those that don't. Whoever has been losing the hi-tech arms race involved has been losing a lot more than just bragging rights.

But, says Kyle, this is just a transition. The high tech stuff is near its limit, and the hardware/software that performs at that limit is itself going to become a commodity. There won't be any "have nots" in the asset management world.

The net effect of the whole thing will be positive: a reduction in equity market transaction costs.

Kyle expressed these thoughts at the Centre for International Finance and Regulation conference on August 11-12.


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