One of the subscribers comments from that Business Spectator...

One of the subscribers comments from that Business Spectator article.

I've sent that article on HFT and Rolland's comments to politicians to see their response.

whoever you are Rolland Clark , I'll vote for you.


Rolland clark wrote:
HFT has destroyed any connection between a company's value and its share price (Turning the table on high-frequency traders, July 19).

HFT has absolutely nothing to do with discovering undervalued companies for investment. It is purely focused on indentifying small changes in demand and supply, of which it may be the cause, and trading in very small time frames to reap small returns and repeating it many many times over.

And as these computers and their systems are only a few feet from the ASX computer, the normal trader and broker will not be able to see let alone participate in any of these trading setups.

Worst of all, long term investment, ceases to be related to the long term value of a company and with this comes a reluctance of the retail investor to consider participating in the market.

Maybe this explains why the US market is trading near its high with a sluggish economy and the Australian market is trading near its low with a strong economy.

So, the answer:

- get rid of privileged location of HFT computers to the ASX
computers, to help level the playing field,

- reinstate brokers id against orders in the system, to help identify single broker setups designed to influence the market

- consider dumping market depth and only show orders near the money,to stamp out off the money large orders that are never destined to be filled but only there to influence,

- consider putting a minimum time period for an unfilled order to remain in the system, say 15 seconds, to discourage HFT in the first
place.

- make Black Pools trade at a price that is only on a weighted average of trades, to prevent them being used to manipulate the price of the market with no risk of the Black Pool shares being traded in the market.

- jail any ASX representative that says HFT is great for the liquidity of the market.

You know that this all makes sense.