More than two-thirds of traders at leading asset management firms around the world are concerned by the impact of high-frequency trading (HFT) on the equities market, according to a survey by Liquidnet.
Liquidnet's Institutional Voice Survey polled traders worldwide from its community of 630 institutional asset management firms. These firms collectively manage equity assets of more than $13 trillion.
Seth Merrin, founder and CEO, Liquidnet says the survey reveals a strong conviction among a majority of long-only traders that HFT is a negative for institutional investors trading large [order] sizes.
Investors are concerned that their long-term investment styles are at odds with the speculative, nano-second profit taking approach utilized by high-frequency traders, says Merrin.
According to studies by industry research analysts Aite Group and Tabb Group, almost 75 percent of overall daily equities trading can be attributed to HFT.
Broadly, global traders are significantly more concerned with HFT compared to those who only trade in their regions. At the top five global institutions, 73% of the traders said they regarded HFT as a high-priority market-structure issue.
Traders' concerns around HFT ran highest among North American respondents with two-thirds identifying themselves as concerned about HFT. This compares with nearly 60 percent of European respondents and over half in Asia Pacific expressing concern regarding HFT's impact on trading performance.