...readers here will note this was inevitable. The cycles have changed and may indeed be reverting back to huge levered bets against binary outcomes in sectors and locations where "real" (as opposed to quote-driven) information is king.
from "Traders Magazine"
Citing internal data, he said that HFTs' U.S. equities profits were
down in 2011 to about $1 billion, which is down big from their 2008
heyday of as much as $4.49 billion. Also, HFTs now make less per trade
than in 2008 - today they make on average between $.0005 and $.00075
per share on each trade versus $.001 and $.0015 a few years ago. In
order to keep making money, these firms need to find new ways to
trade.
"The HFTs need to trade larger volumes and at wider spreads, if
possible," Gawronski said. "After ten years, the HFT business model is
maturing."...
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