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The latest Wall Street buzzword(s) is “High Frequency Trading” also known as “HFT” and it has had everyone on Wall Street up in arms for the past few years. New York Stock Exchange-IEX CEO Brad Kutsayama and BATS Global Markets President & CEO William O’Brien went after it on CNBC Tuesday about the controversial trend. HFT is algorithm-based trading that many investors use on Wall Street, often gathering just fractions of cents on trades (it’s almost like how Peter Gibbons stole money from Initech in “Office Space”) and High Frequency Traders often make several million trades a day, resulting in gigantic margins and huge profits as opposed to the traditional “buy-and-hold” strategy of the stock market. It’s not illegal, but it’s not quite ethical either. It’s actually pretty fascinating.
After a couple of minutes of prodding, Katsuyama calls out O’Brien with the classic “You want to do this? Let’s do this.” Straight up Randy Marsh-style. O’Brien doesn’t back down from the challenge and the two go after it for a good 20 minutes. Every single trader in the background stops in their tracks to watch the carnage. The entire panel gets involved. Host Michael Lewis gets called out for potentially being an investor with Katsuyama. It’s pure anarchy.
[via Yahoo! Finance]