News, analysis and personal reflections on the markets & the financial sector

Saturday, February 20, 2010

Death Threats Against High-Frequency Trading Advocate Fade

Staunch proponent of high frequency trading Irene Aldridge says the e-mail death threats she received last August and September following a controversial TV interview have subsided.

“That was after my first interview with Saluzzi,” she said matter-of-factly in a phone interview late Thursday. Joseph Saluzzi , co-founder of broker Themis Trading, LLC, is a harsh critique of high frequency trading, arguing it rigs the markets.

The CNBC Power Lunch shouting match to which she refers took place on July 24, 2009 when she debated the merits of high frequency trading with Saluzzi.

“The retail and institutional investor is currently at disadvantage to this class of investor which represents 70 per cent of the volume. The equity market structure is corrupt. It needs to be fixed,” Saluzzi said.

“There is nothing new about high frequency trading,” Aldridge shot back. Her position is that high frequency trading, which relies on high speed transactions driven by sophisticated algorithms that find share price inefficiencies and anomalies, actually stabilizes markets and makes them more liquid.

She said she turned the e-mails over the police and FBI.

Either way, Aldridge, who is also a managing partner and quantitative portfolio manager at ABLE Alpha Trading, Ltd., is a lightening rod given her passionate defense of high frequency trading.

And to find her critics, one doesn’t have to go far beyond the comments on financial blogs like Zerohedge.com, for instance. Most are unprintable. That said, she has defenders, too.

“Don’t forget, Irene is merely the messenger….for very conflicted market participants who want nothing more than to perpetuate the current system,” Zerohedge.com Tyler Durden blogger wrote when she was getting the death threats. “Do remember: keep your messengers closer.”

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