There's a dramatic difference between high-frequency trading and other quantitative trading. In HFT, speed is ALMOST everything. It's not entirely, but many of these firms are running VERY similar algorithms (most of the quants have worked at many other firms), and are primarily competing on speed or gaming each other.
Now, there is still a market for advanced quantitative modeling in which reliability is important, and the ease of maintenance, troubleshooting and extensibility make up for microseconds or nanoseconds. A lot of statistical arbitrage can be categorized in this way, although some of the ideas in stat arb are making their way to HFT.
Basically, different applications have different performance requirements. And even though performance is now measured in low microseconds, the battle for nanosecond performance is underway, and extremely lucrative.
Now as to the argument of whether any of this actually provides any value to society, I think the answer is a definitive "no" (wrt HFT). But that's just my opinion - I used to be in the industry but left because of that. The majority of arguments used to justify HFT are really just self-serving rationalizations by people who are only interested in getting rich. It's another example of a screwed up incentive system that is increasing risk in the market rather than decreasing it.
Comments
There's a dramatic difference between high-frequency trading and other quantitative trading. In HFT, speed is ALMOST everything. It's not entirely, but many of these firms are running VERY similar algorithms (most of the quants have worked at many other firms), and are primarily competing on speed or gaming each other.
Now, there is still a market for advanced quantitative modeling in which reliability is important, and the ease of maintenance, troubleshooting and extensibility make up for microseconds or nanoseconds. A lot of statistical arbitrage can be categorized in this way, although some of the ideas in stat arb are making their way to HFT.
Basically, different applications have different performance requirements. And even though performance is now measured in low microseconds, the battle for nanosecond performance is underway, and extremely lucrative.
Now as to the argument of whether any of this actually provides any value to society, I think the answer is a definitive "no" (wrt HFT). But that's just my opinion - I used to be in the industry but left because of that. The majority of arguments used to justify HFT are really just self-serving rationalizations by people who are only interested in getting rich. It's another example of a screwed up incentive system that is increasing risk in the market rather than decreasing it.