The above statement from the high frequency trading (HFT) firm Virtu's IPO prospectus is alarming. Read the Bloomberg article about the IPO delay HERE.
Everyone knew (or thought they knew) about the impact that electronic and HF trading was having on the market. HMV invests directly in field with Motif Investing.
Michael Lewis' new book Flash Boys only offers some true revelations...mainly the degree to which even the large banks, hedge funds and brokers don't understand how the market now operates.
But it is the combination of those revelations (and the renewed scrutiny that comes with it), combined with such statements above, which truly gives pause.
No one beats the market EVERY DAY (except one) over a five year period without an advantage...the kind that smells funny.
The markets are never going to be an equal playing field.
But we do not need to institutionalize gray areas of business ethics into perpetual profits for those whose only contribution to society is faster fiber and decreased latency...all at the expense of the larger "free" market.
April 2, 2014