Cliff Asness, Columnist

Why I Love High-Speed Trading

High-frequency trading often gets represented by people who don't understand how it works.

June 20, 2014 at 3:15 PM UTC

Clifford Asness is the founding and managing principal of AQR Capital Management LLC in Greenwich, Connecticut, a hedge fund and asset-management firm, and is a frequent commentator on financial markets.

A “magnate”? Or “the senior guy at a midsize investment manager”? — A “magnate”? Or “the senior guy at a midsize investment manager”?

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Separately, and along with my colleagues Aaron Brown, Michael Mendelson and Hitesh Mittal, I have written several articles on high-frequency trading. We believe HFT has lowered investors' trading costs and that many of the attacks on it are misguided. We have expressed concern that our fragmented, domestic trading infrastructure is technologically risky and due for a hard look, separate from allegations about HFT. Finally, we've noted the obvious: that while defending HFT broadly, we can't and wouldn't vouch that each HFT trader acts lawfully and ethically (nor would we do so for each Good Humor ice cream salesman).

Bloomberg View contributor Noah Smith recently wrote on HFT. I haven't responded to other articles on HFT, but Smith focuses directly on our writings and his overall conclusion is very similar to ours, though far more equivocal. So, I will make an exception and respond to Smith -- rather than to the legion of rather nutty pieces out there -- out of respect, not ire.