HFT Archive

  • The floors of the New York and London Stock Exchanges now exist mostly for show. The real trading is done automatically by robots. About three-quarters of trades on the New York Stock Exchange and Nasdaq are done by algorithms

    Would you let a robot invest your hard-earned cash?

    The floors of the New York and London Stock Exchanges now exist mostly for show. The real trading is done automatically by robots. About three-quarters of trades on the New York Stock Exchange and Nasdaq are done by algorithms

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  • U.S. regulators have grown so concerned that traders are using high-speed computers to manipulate markets that they’re planning a new tactic to clamp down on the practice -- rating brokers on how much spoofing they allow to flow through their order books.

    Wall Street to Get Graded on How Much Spoofing It’s Facilitating

    U.S. regulators have grown so concerned that traders are using high-speed computers to manipulate markets that they’re planning a new tactic to clamp down on the practice -- rating brokers on how much spoofing they allow to flow through their order books.

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  • The problem with this is huge. They have no expertise on how to even figure out the code and sure they could hire some kids with programming skills, but without trading skills, they really would never figure it out. The only possible solution will be to exit the US markets. If you do not, whatever code you “deposit” with the government will waive all intellectual property rights for the government can take everyone’s code.

    Government Demanding Source Code by CFTC Rule

    The problem with this is huge. They have no expertise on how to even figure out the code and sure they could hire some kids with programming skills, but without trading skills, they really would never figure it out. The only possible solution will be to exit the US markets. If you do not, whatever code you “deposit” with the government will waive all intellectual property rights for the government can take everyone’s code.

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  • What do the following have in common? LIBOR, Bernie Madoff, MF Global, Peregrine Financial, zero-percent interest rates, the Social Security and Medicare entitlement funds, many state and municipal pension funds, mark-to-model asset values, quote stuffing and high frequency trading (HFT), and debt-based money? The answer is that every single thing in that list is an example of market rigging, fraud, or both.

    What to Do When Every Market Is Manipulated

    What do the following have in common? LIBOR, Bernie Madoff, MF Global, Peregrine Financial, zero-percent interest rates, the Social Security and Medicare entitlement funds, many state and municipal pension funds, mark-to-model asset values, quote stuffing and high frequency trading (HFT), and debt-based money? The answer is that every single thing in that list is an example of market rigging, fraud, or both.

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  • Up until about 2006, the primary source of latency, or delay in processing market trading data came from the speed of computers and networks. Wall Street has always bought the fastest computers available, being among the first industries to adopt the latest technology. Faster computers meant faster processing which meant less delay occurred between receiving market data and trading on it. After about 2006, computers and networks reached speeds where the distance between the trading computer and exchange computer started to matter. This is because light, and thus information, has a distinct maximum speed of approximately 186 miles (300km) per millisecond (ms).

    The Beginning of Turmoil

    Up until about 2006, the primary source of latency, or delay in processing market trading data came from the speed of computers and networks. Wall Street has always bought the fastest computers available, being among the first industries to adopt the latest technology. Faster computers meant faster processing which meant less delay occurred between receiving market data and trading on it. After about 2006, computers and networks reached speeds where the distance between the trading computer and exchange computer started to matter. This is because light, and thus information, has a distinct maximum speed of approximately 186 miles (300km) per millisecond (ms).

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  • The answer surely lies somewhere in between. But which is closer to the truth? To find out, we talked to Garrett, an expert on market systems and high-frequency trading. Having experienced first-hand the problems HFTs can cause, he fits firmly in the “detractor” camp, for reasons you’ll read below. Garrett gave us excellent insight into how HFTs profit, along with tips on how to make sure they don’t profit at your expense. I found this interview highly educational, and I hope you do too. It contains the kind of inside intelligence that separates the informed from the uninformed and allows us as individual investors to understand and adapt to our changing markets.

    Interview With A High-Frequency Trader

    The answer surely lies somewhere in between. But which is closer to the truth? To find out, we talked to Garrett, an expert on market systems and high-frequency trading. Having experienced first-hand the problems HFTs can cause, he fits firmly in the “detractor” camp, for reasons you’ll read below. Garrett gave us excellent insight into how HFTs profit, along with tips on how to make sure they don’t profit at your expense. I found this interview highly educational, and I hope you do too. It contains the kind of inside intelligence that separates the informed from the uninformed and allows us as individual investors to understand and adapt to our changing markets.

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  • And it's even worse than that, because these programs are now able to anticipate what you will buy next, in order to buy it microseconds before you push the buy button, then sell it to you at a profit.

    The US stock market has been taken over – by smart people and smarter machines

    And it's even worse than that, because these programs are now able to anticipate what you will buy next, in order to buy it microseconds before you push the buy button, then sell it to you at a profit.

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