Jul 31: High frequency distorts markets

Joe Saluzzi, co-head of equity trading at Themis Trading, an institutional agency brokerage firm, says one of the effects of the SEC's Reg NMS has been a rise in hidden liquidity, which has created "a whole new playground" for high frequency traders. "70 per cent of the volume, as estimated by some research groups, is high frequency related so they are commanding a much bigger role in the marketplace and therefore now the exchanges... have to cater to the high frequency trader." He says this has led to an unfair advantage for high frequency traders and distorted equity markets.