"high frequency traders are "parasites"

Jim Sinclair’s Commentary

It is worse.

High Frequency Trading is computerized illegal cheating that specializes in front running legitimate orders with bids and offers to force the legitimate buyer or seller to change their limits and profit the automatic front runners.

The people who use it know it illegal. The exchanges know it is illegal but it creates volume for them and that is all they give a damn about. Regulators know it is illegal and do not gice a damn.

We are all being attacked from every side so that investment success depends on you being the meanest SOB in valley will to fight anyone who touches you.

High Frequency Traders Are “Parasites” That Erode Investor Confidence: Polcari

By Matt Nesto
Breakout – Tue, Aug 7, 2012 10:36 AM EDT

It was inevitable. No sooner had word gotten out that Knight Capital (KCG) had managed to find a way to survive, and the focus of debate has changed to something more sinister. As stupid or careless as Knight’s admitted software glitch or mistake was, it would never have happened had it not been for the legion of computer-assisted, high-speed traders who prowl the markets in search of opportunities exactly like this – then pounce. Knight’s blunder was their bounty.

Whether you call them high frequency traders, H-F-T’s or algos (shorthand for algorithmic or computerized trading programs), by any name they are "parasites" says Kenny Polcari, Managing Director at ICAP.

"When you sit down and look at really what is the role that high frequency traders play, it’s frustrating," Polcari says in the attached video. "What are they really here for? They’re buying and selling 100 share lots, up and down for pennies all day long."

It’s certainly not the first time a floor broker has complained about interference from HFT’s, but in light of the recent drama – and losses – incurred by Knight Capital, the issue is resurfacing with a vengeance. As always, any argument to constrain technology, from within an industry dominated by – and reliant upon – technology, can be a little tricky. But for those who have lived and traded through this crisis, and the Facebook IPO, and the BATS flap and the Flash Crash and many, many more that never earned a catchy nickname, the problem is about technology and maintaining confidence in the markets.

The above was from http://www.jsmineset.com/2012/08/09/in-the-news-today-1272/ where a link was provided to the rest of the article and video at
http://finance.yahoo.com/blogs/breakout/high-frequency-traders-parasites-erode-investor-confidence-polcari-143626622.html