Those
who defend high frequency trading say such trading improves market
liquidity, It assures a buyer or seller availability whenever one wants
to trade
High
frequency trading benefits mutual fund investors and traders in that it
reduces costs. It lets investors with fast computers take advantage of
small price discrepancies and brings market liquidity.
.
In
the past, the stock market was efficiently operated by middle men or
“market-makers.” They normally completed sales by buying and selling in
their own accounts, if they could not immediately match buyers and
sellers. Market makers profited on the difference between the bid prices
buyers were willing to pay and the ask prices sellers accepted.
The
SEC is tightening its controls of high frequency trading which it’s
currently suspicious of, and further studies the matter.(See the
Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)
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