AndyNZ

spierce Wrote:
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I don’t know why I’m trying to explain things to you, since you seem to have an axe to grind. Hopefully others will benefit from a more rational discussion.
There are obviously still imperfections with the markets; in particular I’ve noted the fragmentation of equity liquidity is a problem. The markets will never be perfect; nonetheless the markets are fairer and more liquid than they were ten years ago, particularly for the retail investor.
For instance, as a retail investor in my Fidelity account, I can trade the S&P500 index in real-time, commission free via an ETF. Should I choose to invest in it, I pay a ~9bp expense ratio. Should I choose to trade it, the spread is usually $0.01. The top of book is usually liquid enough to support $1,000,000 trades at market. This is effectively infinite liquidity for a retail investor trading this asset.
HFT plays a major role, not only in liquidity, but also in the efficient aka fair pricing of all kinds of cross-market assets. This cross-market liquidity allows retail investors to trade markets at very fair prices when they were previously inaccessible. Two examples: GLD and LQD are ETFs that enable the retail investor to take previously-difficult-to-assume risks (gold and diversified IG corporate bonds), due to market structure and minimum price. (Front month gold on the CME is more than $100,000 per contract, and a diversified bond portfolio would require even more capital.)
One could argue the rapid pace of financial innovation is contributing to the bubble pricing of gold and bonds, but I digress.