AQR Principal Defends High Frequency Trading

High frequency trading (HFT) is finally getting some of the mainstream attention that it deserves, with an FBI fraud investigation, a critical segment on 60 Minutes, and now a Wall Street Journal op-ed from founding and managing principal Clifford Asness defending HFT for supposedly reducing the cost of trading. High frequency trading defenders says it improves price discovery High frequency trading, as a broad set of strategies that all depend on being faster than competing traders, is opaque both because HFT firms don’t want to reveal the tricks of the trade and lose their edge, and because most people don’t…