The REAL issue with HFT is that , much like the shorting market, is that Large shareholders, usually institutions, "lend" their stock out to Algo trading platforms and Short funds, to provide certainty to those parties for settlement. For this service, the fund gets paid a fee. So far so good, except that, because, there is no requirement for funds to notify the exchange of this service, the unsuspecting public is actually investing in companies whose issued capital is now a completely unknown quantity.
I have been investing in shares for a long time, and fundamental to my process is knowing where levels of liquidity lie. In other word, IPO prices, placement prices and rights issue prices. These levels usually provide good markers of support and resistance, as do market sensitive announcements that create a liquidity point. By lending stock to Algo's and Short Funds, the lines become blurred and we, the investors, become the muppets who know less than the funds and the borrowers of their stock.
Below is a recent article written by a CNBC writer that discusses the central matter that stock exchanges around the world NEED to take seriously, if they dont want a monumental class action on their hands from us, the unwitting investor.
