After last week's 'fat-finger-accident' a full investigation into the methods of HFT is required more urgently than ever. This should comprise full public disclosure of complete transaction records so that independent outside analysis would be possible. This would help to find answers to two questions in particular: (1) is the high-frequency trading fair to all market participants (2) who profits from it? As some major firms guard the secrets of their algorithmic trading (Goldman Sachs for example persecutes a former employee who it accuses of taking proprietary information about algorithms) there is a suspicion that things are skewed against the wider investing public - why else would someone try to keep information secret?
A quote from Barron's Magazine may shed further light on this problem: "our market structure has evolved to cater to masters of expensive technology, deployed unfettered by participants whose only concern is to squeeze out every last picosecond and fractional cent." (Sal Arnuk and Joe Saluzzi of Themis Trading).
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