Although the banking sector sees high-frequency trading as beneficial, and most academic studies indicate that it should improve overall market quality, Kwan and Philip’s research confirms the unease among traditional punters and regulators that high-frequency trading may have a toxic effect on the market.
Kwan A, Masulis R and McInish TH. (2015), ‘Trading rules, competition for order flow and market fragmentation’. Journal of Financial Economics, vol.115:2, pp. 330-48.