"From ButlerResearch on HFT:

"The exact methodology being deployed that enables the dominant commercial traders to pull this scam off repetitively, aside from outright collusion, is High Frequency Trading (HFT). HFT is the collusive bundling of advanced computer hardware and software that is so advanced and powerful that it has achieved the power to move prices sharply with little actual trading required in setting prices. The way HFT works is that the collusive trading programs suddenly flash great numbers of contracts for sale. But before much actual selling occurs, all the other traders in the market see the great volumes of contracts apparently offered for sale and these other traders withdraw buy orders and start entering their own sell orders to get ahead of the great wave of HFT sell orders offered. Then a not so funny thing happens. Most of the time, very few of the HFT orders originally offered for sale get filled or executed. Instead, they are quickly cancelled. There's even an operative term for this practice that's perfect - spoofing.

"Most of the HFT orders are never filled, nor are they ever intended to be filled. These spoof orders are intended to scare others into selling so that the dominant commercial traders can buy gold and silver contracts. And make no mistake, this phony HFT activity has been successful,"

David Fuller's view This analysis is correct, in my opinion, and I regard spoofing as immoral and probably illegal. If the SEC and other regulators have any sense and wish to establish an approximately level playing field, they will ban spoofing and impose heavy fines when it occurs.

The additional volatility sometimes created by HFT is unsettling, to put it mildly. However, it can play into the hands of alert value investors, as I have mentioned before.