gaika

It is exactly what happened in France when they introduced a similar tax. All traders moved into CFD (contract for difference) instead of trading the underlying stock.

Those traders who didn't exit during the flash crash profited the most, what makes you think they will pull out the next time? On the flip side: those Market Makers that were forced to trade Facebook on the day of the IPO lost the most, when the system was totally broken, what makes you think they will handle the next problem better?

Anybody who's making a profit is almost by definition making the markets more efficient and less volatile. They buy when the price is low (pushing it up) and sell when it is high (pushing down).

For example traders in equities can participate in "on close" auctions if they prefer to do so. No millisecond guessing, no bid/ask at all, pure double side auction. Yet only ~10% of the volume goes there.

You can open up your own ECN and offer fixed auctions every minute if you think this will attract people who feel cheated by HFT.

HFT serves the same purpose that human Market Makers and Specialists do, only better. Kill it, and you will end up paying more.

Did you complain when human travel agents were replaced by expedia and like? Would you complain if car salesman as a profession is gone? Do you see your profit when amazon is competing with all brick and mortar shops? What makes HFT so special in that list?

So strange to see that sentiment from a science fiction author. Afraid to lose to reality evolving faster than you can imagine?