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The Rise of Black Pools and Why Canadian Markets Are Moving Away From Bank-Owned Dealers from Mohammad Daniyal's blog

Advocates argue that Large Frequency Traders offer needed liquidity while opponents raise the banner of the "small person" aka the tiny ton investor or retail trader, to be damaged by HFTs. The issue is whether the common investor is really a victim of HFT activity when many investors get mutual funds, additionally the largest mutual funds don't utilize the transactions for their big lot purchases and are therefore seldom impacted by intraday HFT trading on the exchanges.The question of whether Large Frequency Trading is great or bad for the financial markets is never as easy as the news might have everybody else believe. The issue and any answers are as complex as the planet of HFTs, which deal across all financial areas across the world.

The roots of High Volume Trading originated from the Day Trading Floor Traders of the 80's and 90's. The market makers of that time decided to test blending out the rising annoyance of rogue ground traders, who broke far from their prior employers on the transactions to business alone with the modern PC pc that permitted them to business at home. These separate time traders ushered in a fresh period of fast in and out trades, that took advantageous asset of the wide spreads between the ask and the quote of unusual options activity fractions pricing design of this day.

Industry makers lobbied for decimal pricing design believing that the tighter quote and ask would press out the qualified separate time trader and the newly minted retail time trader. These traders could begin to see the large ton orders of the institutional customers moving through transactions, and could leap in in front of the enormous ton get forcing value up. That infuriated the institutions and the market makers who handled these big lot purchases with respect to the giant common and pension funds.

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