Wall Street's high-tech war on investors

HFT computers can detect large buy orders for a stock, the kind of buy orders mutual funds make, even when the funds try to disguise them. The HTF system can then purchase that stock before the mutual fund's order is executed. The fund ends up paying more per share, and the HTF traders pocket the difference.

This isn't illegal; it's akin to cutting into a long line at the supermarket. "

Oh it is very much illegal. It's called front-running. HTF systems would not be able to detect these trades unless the mutual funds placed the orders with the parent borkerages, which means those brokerages either cannot participate in the trade or have to take the opposite side of the trade.

I fail to understand why the Wall Street traders, HFT or otherwise, get any respect.  They add no more value to society than do the horse players at the track who add to the market efficiency of the parimutuel horse betting market.

Every dollar they make trading is a dollar that someone else doesn't make, and they're not adding any capital to the economy - they're taking it out.

Would anyone like to take at shot at explaining that?

Many floor traders and brokers have been fined, reprimanded, prosecuted, imprisoned, and had their licenses removed over the years for engaging in the exact same practices that these HFT schemes are now executing at the speed of light. It’s unconscionable to me that the exchanges and the SEC are allowing it, and in some ways even encouraging it. This is as much of a fundamental violation of fair trading practices as the mortgage market was a fundamental violation of risk management practices.

I’ve been a small, long-term retirement investor for 30 years and have never seen anything as disgusting as these HFT practices in the market. I’m now in the process of executing a short-term plan to get my retirement funds out of the financial markets and into other types of investments that are outside the control of Pin-Striped Pirates of Wall Street.

How do they figure that HFT add liquidity?  In the case of front running a big mutual fund order they simply buy shares that are already being offered for sale by owners & resell to the mutual fund at a profit.  That's a middle man collecting a profit on an unneeded service since the mutual fund would be perfectly willing to make the many smaller transactions.

The comment "If traders can use technology to figure out when mutual funds bumble into the market with a big order, they deserve to profit from it" is ridiculous.  Whoever said it is scum.  That mutual fund did a ton of research to 'bumble into the market'.  The HFT is simply scanning the market for opportunities to make easy money.  It's immoral which comes as no surprise since it comes from Wall Street but if the current administration truly wants change that we can believe in they will stop this immediately.