Sorry, I can’t agree with you on this. Why someone buys or sells, or how often, is their own business. If you’re a buy-and-hold investor, then you should be looking to buy stocks at a price you think will allow you to sell at a profit later. If you think these high-frequency guys are driving up prices, making you pay more, then aren’t those same guys keeping prices up, making it more lucrative when you sell? Or aren’t people that are selling today getting a higher price than they would without the HFT’s?
The reality is that we used to pay 6- to 10-cents PER SHARE to trade, and bid/ask spreads on NASDAQ or OTC stocks were 1/16th (6.25-cents) or 1/8th (12.5-cents). Now just about anything you want to buy can be had for flat-commissions, and bid-ask spreads are a penny or less. That’s because the HFT guys are doing with computers what floor brokers and retail brokers used to do all the time. They just do it more quickly, efficiently and cheaply.
If you’re an investor, then these guys have virtually no impact on your long-term returns, and maybe even help them, because the market is priced more efficiently by their presence.
You apparently believe in free lunches. The HFT guys are a net minus in terms of dollar flow into the market, otherwise they wouldn’t do it. Brighten up, they drive up the price I pay and drive down the price when I sell. It’s heads they win, tails I lose, that’s the whole point. Just because they only took a penny each way from everybody in the entire market doesn’t mean they aren’t stealing.
The market and all the securities within it are net priced based on money flow in versus money flow out. These guys are essentially taxing the market, without adding value. Your price stability argument is bs because the stock will be priced by demand no matter what the HFT guys do. The amount of volatility they tax can’t and won’t stop major sudden shifts, and minor shifts would not be harmful with or without HFT.
The cost of trading comes down regardless, as brokers will always look to attract investors with better pricing and the only thing HFT provides is a technology for removing a percentage of investors money from their accounts.
Go sell crazy some other place, we’re all stocked up here.