It's not high frequency trading (HFT) that concerns us. It's
high frequency quoting,
and it should concern everyone.
The two images below tell
the story. The chart on the left shows the growth of high frequency quoting. The chart on the right shows the (lack of) growth of high frequency trading. Quote data is from
CQS, trade data is from CTA, both
which cover listed stocks on NYSE, AMEX, and NYSE-Arca between 2008 and 2012. Quote spam
has exploded with
no signs of stopping, while trade frequency has stalled and is actually lower
than it was years ago. Each day is plotted in a separate color over the course of a trading
day (9:30 to 16:00 Eastern): older data uses colors
towards the violet end of the spectrum, recent data towards the red end of the spectrum. The gaps you see
between color groups on the quote chart (left-side) is when system capacity was upgraded to handle the increase in traffic, and quote spam jumped to fill the new capacity
that very same day.