How is that even close to the point he was making? HFT vs HFT algo trades happen infrequently. They do happen, but it's rare. But guess what? This forces each other to be better, just like any other competitive industry. The ones that do poorly consistently are just being told by the market that they should leave and go find something else to do, because they're not any good at this.

If it's bad that one firm capitalizing on the situation of another firm making a mistake is the point, then I think he should really rethink his participation in capitalism.

Quote "robots trading with robots without any regard to the stocks they are trading." end quote.

The problem with the competition between HFTs is that it's turned into a ridiculous arms race to shave microseconds off the response time - how is that in any way productive?

Without any regards to the stocks they are trading? Ironically, Mark Cuban shoots himself in the foot here when he complains about macro events dominating micro events.

It turns out to price an asset, like a stock, a wide variety of skills is needed. Some people focus on macro trends, like analyzing political events, oil prices, etc. Some people talk to management of the company, count cars at Wal Mart, etc. These are the micro trends.

And some people try to estimate the current supply and demand for a certain stock. That is what HFT does. So yes, it has "regards to the stocks they are trading." Just different regards. That's why specialization works so well. HFT worries about current supply/demand issues, and tries to estimate a fair price to set the market so that when the average investor comes in, and looks at a stock with a 1 cent spread, he is going to get a fair price. Over the long term, people who analyze micro and macro factors will trade with HFT, which will then force the algorithms to change the stock price to reflect their views.

Is an arms race to shave milliseconds off of trading times the most important thing in the world? Absolutely not. But is gaming the Apple app store to get your mobile app higher in the rankings any different? At least with HFT, milliseconds do matter in more situations than you can imagine. If one day you buy a stock that had bad news announced just milliseconds before, and HFT did not update that quickly so you paid a price way, way too high, you would be upset. Again, not the most important thing in the world but it does help.

The millisecond thing is highly overrated. Anyone in the industry knows that it only matters to a small degree…understanding supply demand and adjusting accordingly is the most important skill. That's why the most profitable high frequency firms don't care about what millisecond they execute in…that is one of the great ironies of this--you guys are concerned about something that not many other people who actually do this for a living are concerned about. But you guys latch on this minor point as the major one, and that is a mistake. Do developers worry about how quickly their apps load? Yes. Does it mean their product will be a success? Not necessarily. That is the same thing here. HFT shops work to make sure they aren't too behind, but focusing on that aspect is just trivial compared to the actual work they do.

No.