Matt Levine, Columnist

Why Do High Frequency Traders Never Lose Money?

I know there are people who do not believe that "liquidity provision" is a thing, but the people who pay for it seem to believe in it, so what does that tell you?

March 20, 2014 at 1:34 PM UTC

By Matt Levine

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

Provide news feedback or report an error

Site feedback:

Take our Survey

So I didn't like a lot of things that Eric Schneiderman said in his "Insider Trading 2.0" speech against high-frequency trading on Tuesday, but here is a particularly puzzling bit of it:

Puzzling because, one, why does he seem to hope his entire audience of lawyers day-trades, and, two, there's a serious misunderstanding of the trading industry here. Schneiderman is referring to Virtu Financial's much-discussed recent IPO filing, but similar complaints have been leveled against Goldman Sachs and JPMorgan and ... well, Goldman Sachs, a lot. Every firm that is in the trading business seems to make money on trading on a whole lot of days, and lose money on a whole lot fewer days.