I'm certainly glad that there is at least one federal judge with some common sense.

Many of the allegations in these suits were publicized and none that I saw exhibited any basis in fact-- some were not even technologically possible. Among the impossible being that the exchanges gave algorithmic traders with low-latency data feeds the ability to "front run" private investors.

Perhaps this will help stop the negative press that has been hurting all of us involved in high frequency trading-- either as traders, or equipment/software providers.

Typical

HFT cannot be stopped, it will be there where-ever automated trading is allowed by the exchange. And this is just the initial stages, I expect there would be more 'glitches' like the flash crash.

This is a right decision by the judges. The regulatory bodies, on the other had should wake up to the changed scenario where HFT will keep on growing, and they (the HFT algos) will be taken for a spin now and then by the 'other' algo traders (non HFT).

sadly HFT if allowed will destroy all fair and orderly trading .

Therefore we need to immediately restore fair & orderly markets ...... if HFT

CANNOT restore or accept this then sadly they must go!

@Nicola - I agree with you completely. I have read the details of the allegations and some were so absurd as to be humorous.

I spoke with folks at the CME a couple years back. I asked them if little futures traders like me had a level playing field, they said absolutely. So I asked them if that was true, why in the world would all of these sophisticated HFT firms spend all this extra capital for their special data feeds since they had just told me the playing field was absolutely level. They stammered and danced around the question but answered it just fine anyway. Lets not kid ourselves here. If there wasn't a large economic advantage from these 'HFT feeds' then any rational actor wouldn't pay for them. I'm not saying algos are bad or problematic, they are the future, but don't BS me that the playing field is level because it is clearly not. The exchanges have bastardized the term 'markets' into what is best for their publicly traded EPS numbers. The game is rigged, the lawsuit should have went to a jury because they would not be blind to the BS here like so many seem to be. Trade well.

The playing filed is level-- but there is more than one field at each exchange. The trader/investor gets to choose which field they want to compete in. Even within HFT there are different layers based on tick-to-trade latency (time domains). Systems like ours in the sub-microsecond range compete at a different level than those in the multi-microsecond domain.

As latency keeps increasing then the trader needs to adjust their strategy to successfully compete in their chosen time domain.

Also, smaller players can form technology cooperatives and spread the acquisition and operating costs of a high-end HFT platform across a dozen or more members.

I suppose the same complaints were made with every technology upgrade. When bicycle messengers replaced runners, when telephones replaced bike messengers, etc.

I respect that last comment, I'm very much a technologist and embrace tech. My point is that at some quanta of time there is an undisputed price value for ES futures (for instance) but it will be served up to others before me, mainly because I do not have access to those data feeds into the market place unless I 'pay up'. Of course I won't have the pipes, latency, etc., that someone co-located would have, I understand that. The issue is all of these different 'fields' as you describe them end up at exactly the same place, but nowhere near the same time. My argument remains. If there wasn't enormous economic incentives here the HFT feeds wouldn't exist. Someone is losing $'s to the parasitic actions of HFTs and I know its guys like me because money doesn't appear out of thin air except at the federal reserve.

Given current law, the judge had little choice but to toss this back to the SEC, as they approved these access regimes and each and every one of the "special" order types which are now in place at all the exchanges. But let's not kid ourselves, there's a big difference in latency between the SIP (run by Nasdaq and NYSE) and all the direct feeds, and there used to be between some market's direct feeds. Some might call taking advantage of those latencies front-running, others just paying to play... it all depends on one's POV. All that said, there does seem to be too much testosterone invested in all this -- what's next, a Darth Vader dark pool, Jedi SORs, an HFT firm called LegSweep? Ya gotta admit from the standpoint of marketing and PR alone, on this stuff our industry has shot itself in the foot several times over. Maybe the CBOE in abundance of caution should brand its next low latency platform Bambi.

@Edward, maybe I misunderstand what you are getting at but if you are colocated at Aurora, how are you disadvantaged?

As Nicola mentions, the playing field(s) are level but there are lots of different fields. I maintain one can't expect to hit like a major league baseball player just because you are standing at home plate in a major league stadium. Aside from natural ability, playing baseball is their job, it is what they do all the time, not just here and there; same with trading. None of this comes easy, ever.

There are lots of trades where you can't compete on speed but I could tell you a dozen where you don't have to; you can't be crazy slow (click trading from across the world) but in the futures market because it is centrally cleared there is no front running as can happen with fragmented markets.

Then again, as I said, I might be missing your point entirely.

Great insight Nicola. There are indeed multiple tiers of technological needs for different traders, and their decision to lease a direct feed is, of course, based on their economic interests. A rational investor or human trader should have relatively little interest in receiving up to the microsecond quote and trade updates for the entire book--that's just more data than is relevant for their needs. However, obviously, HFT participants want that information as fast as possible. The ability to decide whether you pay a large amount for a lot of information quickly or a smaller amount of more concise and relevant information (brought to your home computer by a conveniently packaged API that eliminates the need for FIX expertise) based on what trading activity you engage in is more of a democratizing convenience to small traders than it is a privilege granted to better capitalized traders.

Where can I read the complaint? I hope they did not confuse fiber optics with supercomputers.

Neil, can you be more specific? Is it the HFT trading platform itself that is going to destroy all fair and orderly trading, or the one or two rouge traders who exploit the system illegally towards their own ends, and can be found among the ranks of traders on every platform,and every time period throughout history? Please clarify who it EXACTLY who must go.. the service providers, mm radio waves, servers, and risk platform operators..... I have no idea what your talking about from your brief note, and would welcome some more detail

hft illegal? lol