More on High Frequency Trading Costs

                   

In addition to our previous blog: Transaction cost arises from the fact that a fund's huge trades can drive prices up or down by tipping the balance of supply and demand. High-frequency trading has helped reduce "market-impact" cost by making it easier to break big trades into many little ones while transacting them very quickly,

                       

Trading costs from spreads and market impact have been cut in half over the past decade, From 0.5% of the trade amount for big company stocks to 0.25%. For small stocks, trading costs have dropped from 1% to 0.5%. In addition, high-frequency trading helps bring out hidden liquidity.

                       

The positives seem to outweigh the purported negatives. (See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)