No matter how much markets and rulebooks across the globe are changing the need for speed is not going away; it is as persistent as it ever has been. Just in the past week, German and other EU regulators voted to implement a series of curbs to address concerns about high-frequency trading. (See Rebecca Healey’s “European Parliament: Slamming the door on HFT” on TabbFORUM for more.) You can expect other jurisdictions – namely in the US - to augment the debate (see Larry Tabb testifying before the Senate Banking committee on HFT and Equity Market Structure on TabbFORUM as well), for the drumbeat of rhetoric to become louder and louder, and for additional measures to be brought to the front lines. In a period of deleveraging and the resource constraints it inherently fosters, you can bet that there will be lots of bogeymen to chase – real and imagined.
Yet, none of this changes the need for speed. Speed has always been a part of the story, always will be. (BTW, if anything, highly automated trading programs have done little more than replace the hundreds of floor traders that formerly captured “lubrication profits” in a prior era, but that is an entirely different commentary.) In fact, solutions for speed will continue to march forward in spite of the regulatory and economic headwinds that have seemingly put an end to what will eventually become known as the “Golden Age of HFT”. These solutions will continue to become smarter, cheaper, and, in some cases, faster – as they inch, microsecond by microsecond, closer to the barriers of the speed of light at lower costs.