This chart from Technology Review shows the growth of high speed trading over the last few years. As the article says, at some point somebody other than insiders like Knight Capital is going to get burned, perhaps just some average investors.
You can thank 401(k)s and IRAs for a lot of this. In many cases these are just money that is not actively managed by the people it belongs to, allowing the stock market to play with it. They have just anted up and put a huge pot of money on the table for the hedge funds and big investors. As this money gets churned, the big guys probably get rich (unless their computer program blows up) and the little guys get fleeced. It's virtually (no pun intended) impossible for the SEC to police, because it's so big, so fast, and so complicated.
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