> Warren Buffett Blog: Warren Buffett on HFT

Sunday, June 1, 2014

Warren Buffett on HFT

It's[High Frequency Trading] not a liquidity provider. It may create more volume. But that's not the same as being a liquidity provider. To the extent that it's front-running, I think society generally has been against front-running for good reasons and where it's — in the old-fashioned front-running, they had rules against it.

Here they gained a natural advantage by speed just by figuring out how the system worked and then getting there first, and that adds nothing to GDP or anything, a real output of goods and services. On the other hand, the market isn't regulated. And for the small investor, they've never had it so good. And high-frequency trading I don't think costs them a penny probably.