To give a sense of perspective, consider that an HFT making $0.001 per share in SPY has an alpha that is worth roughly 0.0008%. A one penny spread is ten times this amount. In contrast, long term investors are able to effectively employ active strategies. Their alphas are orders of magnitude greater than the cost of crossing the spread.
Arzhang Kamarei — To give a sense of perspective, consider that an HFT making
To give a sense of perspective, consider that an HFT making $0.001 per share in SPY has an alpha that is worth roughly 0.0008%. A one penny spread is ten times this amount. In contrast, long term investors are able…