OK, this more an allegation from stock market critics than a proven fact. But concern among investors has grown that market volatility is being fanned by firms engaging in tactics such as "high-frequency trading" (HFT), and that these firms are essentially gaming the volatility to their own advantage.
Whether HFT is a huge problem or not, the perception hasn't done much for the confidence of ordinary investors – whether of the 401(k) or day-trading variety. HFT means very fast trades, carried out by powerful computers that are located close to financial exchanges, can take advantage of small share-price moves in milliseconds. Critics say the result is simply enriching some firms on Wall Street, without any larger benefit to the liquidity and transparency of financial markets.
All this seems a far cry from the 1990s, when prosperity on Wall Street seemed to go hand in hand with rising balances in 401(k) retirement accounts. Oh, and about those accounts....
