This article is so obviously a huge puff for Bloomberg, the company. Self-serving and a very misleading view of the causes and real effects of HFT.
Nina Mehta, whether knowingly or otherwise, seems to think that HFT was created by regulation. Poppycock!

What SEC insider do I have to pay off so My comments get the Big red banner on them? jk

Then we all agree. For the benefit of regular investors, we have to tax these transactions until they are no longer profitable.
All we have to do is get the public at large to understand this basic fact about the stock market so that Congress will outlaw it. Good luck with that.

Why not have all this trading taxed by the United Nations, world wide?

The money is borrowed at less than 1/2 of 1% annualized to make 1/10th of 1% per day. That's a risk reward of over a 100 to 1.

Its very, very profitable.

does high speed trading have anything to do with the actual value or performance of the underlying companies or is this just benefiting from ultra-speed?

@ Joe

Yes, it adds liquidity -- meaning that when you want to buy or sell it is easier for you to find a trade.

That said, I think the practice is bad for real people and real businesses.

After the market crash brought on by computerized trading in 1989 (I think), measures were supposed to have been put in place to keep it from happening again. Are those measures working? I seem to remember we had a similar crash (though small in comparison w/2008's), which surprised me because the new rules were supposed to prevent it. Could it happen the same way again?

How is high frequency trading NOT FRONT RUNNING?

If a large investor wants to buy or sell a large number of shares, he needs to outsource out the actually trading to an HFT otherwise other HFTs could game him.

Any chance the Stock Exchange's own "circuit breaker" computers will not be fast enough to even see a future flash crash?

Yep, no hope for us slovenly little investors.

Does high frequency trading offer any usefulness?

It's just less money going to companies that use the capital to create jobs and less for legitimate investors.

What a world it'd be if it were not allowed to bet on another's loss for profit. I believe this is immoral because it gives an incentive for one to stop caring for another - indeed to want them to fail.

I am a sixty year veteran of Wall Street. The HFT gang is composed of a small wilful group who have turned the Nation's markets in to their own schoolyard sandbox -- bullying and pinioning and pillaging their way across the tickers. They are abetted by a cadre of clueless academic scribes-for-hire and a clueless SEC. The HFTraders have the best regulation money can buy and it was granted by the four congress members from Manhattan: Rangel, Maloney, Nadler and Velazquez.

Wall Street and high frequency trading in particular are an incredible waste of smart people. Anyone that wonders why we're slipping behind in technology just has to look at all the brain power devoted to making money instead of science. This brain drain started way before the current financial crisis and it seems to have no end.

Who knows what all these math minds could have done for the world if they weren't focused on squeezing a few extra pennies out of every trade.