After decimating equity and commodity markets, the HiFreqs have boldly gone and broken another market – FX.
But that is not news: we reported over two years ago, that while HFT accounting for all of the churn – not liquidity - in stocks, bonds, and commodities, HFT had moved on to the final frontier, FX, where even the smallest moves now are catalysts for avalanche-like surges and plunges on the most meaningless of newslfow.
What is news it that finally it has been caught in the act. From Reuters, which is also an involuntary accomplice in this latest HFT unmasking, courtesy of its institutional FX trading platform: “Thomson Reuters Corp is investigating whether one of its currency trading customers gained an unfair advantage when making high speed foreign exchange trades on its platform.
Lucid Markets, a privately held electronic trading firm registered in Great Britain, may have benefited from trades using several connections on the Thomson Reuters Matching platform.”