In today's Financial Times John Gapper writes (3.4.14), why Goldman sells his Seat at the New York Stock Exchange : The boom in high frequency trading combined with dark pools is over. Due to increased competition, profits are down massively. While the leading trader Tabb Group 2009 recorded revenues of USD 7.9 bn, the revenues for 2014 will shrink to estimated USD 1.2 bn.
Moreover reputational risks are rising: Michael Lewis managed to gain huge publicity with his new book"Flash Boys". And the FBI, the SEC, and New York State attorney general Eric Schneiderman are investigating. There is a lot of indication that even trades of big institutional investors are being front run and markets are manipultated on a big scale.
Time for Goldman Sachs to say goodbye. They have not only a great sense for profit opportunities but also master risk management like nobody else.
High frequency trading was a typical Wall Street "Boom and Bust"!
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