"By 2010, HFT accounted for more than 60 percent of all U.S. equity volume and seemed positioned to swallow the rest. Swanson, tired of Citi’s bureaucracy, left, and in mid-2011 opened his own HFT firm. The private equity firm Technology Crossover Ventures gave him tens of millions to open a trading shop, which he called Eladian Partners. If things went well, TCV would kick in another multimillion-dollar round in 2012. But things didn’t go well. "For the first time since its inception, high-frequency trading, the bogey machine of the markets, is in retreat. According to estimates from Rosenblatt Securities, as much as two-thirds of all stock trades in the U.S. from 2008 to 2011 were executed by high-frequency firms; today it’s about half. In 2009, high-frequency traders moved about 3.25 billion shares a day. In 2012, it was 1.6 billion a day. Speed traders aren’t just trading fewer shares, they’re making less money on each trade. Average profits have fallen from about a tenth of a penny per share to a twentieth of a penny."
Posted on: Fri, 07 Jun 2013 21:44:15 +0000