Comments on: Wall Street meets The Matrix http://blogs.reuters.com/commentaries/2009/07/30/wall-street-meets-the-matrix/ Now raising intellectual capital Sun, 08 Nov 2015 08:31:30 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Michael Catania http://blogs.reuters.com/commentaries/2009/07/30/wall-street-meets-the-matrix/comment-page-1/#comment-5806 Tue, 13 Oct 2009 12:08:46 +0000 http://blogs.reuters.com/commentaries/?p=1921#comment-5806 One has to agree that idividual stocks should also have circuit breakers if the market itself has them, however, one also has to wonder with the speed of the machines so ever increasine and market rates going ever so higher will the circuit breakers be fast enough to stop the perfect storm.

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By: Deferrd Comp http://blogs.reuters.com/commentaries/2009/07/30/wall-street-meets-the-matrix/comment-page-1/#comment-1519 Fri, 31 Jul 2009 16:50:58 +0000 http://blogs.reuters.com/commentaries/?p=1921#comment-1519 There is no industry on the face of the earth where participants have been forced to transact at speeds beyond human capabilities except in the modern world of equity / high frequency trading. This serves no purpose to anyone but those who seek to profit unfairly at everyone’s expense. The integrity of the marketplace is at stake.

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By: Stuart Wheeler http://blogs.reuters.com/commentaries/2009/07/30/wall-street-meets-the-matrix/comment-page-1/#comment-1506 Fri, 31 Jul 2009 14:11:32 +0000 http://blogs.reuters.com/commentaries/?p=1921#comment-1506 Supporters of HFT claim that this programmed trading provides liquidity to the markets. Traditionally, this would mean more activity, leading to tighter spreads. Yes, there is increased activity, but has it lead to tighter spreads? To myself, and other non-computerised traders who are getting far worse fills than expected, it seems that this is more a case of an increase in volume with far WIDER spreads. This is all down to the additional slippage that these HFT machines are introducing in order to skim profits off as many trades as possible where they act as a middlemen.

When you look beneath the glossy hi-tech surface of HFT trading and dark pools, it seems increasingly like we are now in the age of the computerised bucket shop.

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By: Antonio Ivan Easterling http://blogs.reuters.com/commentaries/2009/07/30/wall-street-meets-the-matrix/comment-page-1/#comment-1505 Fri, 31 Jul 2009 14:09:03 +0000 http://blogs.reuters.com/commentaries/?p=1921#comment-1505 From:
Antonio Ivan Easterling
Chaplain; Editor-in-Chief
The Proletarian Review

Topic:
The GAS Law

1. Yes, I want high-speeed computers business networks bridled in Wall Street tradining, even more so, I want the GAS Law. A General Accounting System (GAS)to enforce compliance when trading bonds, stocks and options.
2. When personal and professional life-saving are at-risk, and after the biggest banking debacle in business history, tracking assets, cash, credit and equity is the order of the day forever and forever, amen. Wall Street is the last glimmer hope for the Proletarian Class in the United States of America to enjoy the 14th amendment to the United States Constitution. Since the Middle Class professional (White Collars) have destroyed any hope and promise that laid in this country. Well, let the Proletarian Class (PC)take charge of Wall Street under the Sarbanes-Oxley Act of 2009 to ensure and assure that 20 percent of someone Social Security expenditure or 100 percent of a Proletarian personal retirement is protected by banking statues and the iron-clad will of the United States Armed Forces, as well, as globalized NATO forces on-the-ready. For this reason, any fraud and/or violation of the GAS Law is considered a blantant act terrorism against the people of the United States of America and our Public Trust. An accounting problem will be charterized as an act terrorsm. This is why Flash Trading should be against the GAS Law and/or the Law, period.

Antonio Ivan Easterling
Chaplain; Editor-in-Chief
The Proletarian Review

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By: mark http://blogs.reuters.com/commentaries/2009/07/30/wall-street-meets-the-matrix/comment-page-1/#comment-1504 Fri, 31 Jul 2009 13:54:58 +0000 http://blogs.reuters.com/commentaries/?p=1921#comment-1504 look at the history of hede fund collapses before and after electronic trading – bring back the human eleement bring back actual people making decisions – the only use for electronic platforms is to generate fees for exchanges

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By: Bas http://blogs.reuters.com/commentaries/2009/07/30/wall-street-meets-the-matrix/comment-page-1/#comment-1502 Fri, 31 Jul 2009 13:24:02 +0000 http://blogs.reuters.com/commentaries/?p=1921#comment-1502 The algorithms were build to detect patterns and act upon them, and there is more HFT the patterns are more and more determined by other HFT algorithms.

These algorithms will likely trade themselves to a single victor if there are no limiters set in the code; any other equilibrium is highly unlikely. When this happens the market will be determined by the HFT algorithms and most of the companies that opperate HFT will see massive losses, and a few will see massive gains. The stock prices will also be a mess after they are done.

But noone wants this to happen so each company that opperates HFT limits how much money the gamble on their algorithms at any given time. They know that there is a point where things will go unstable and nobody wants to be the one that gets the market there.

But even if each company keeps an eye on them selves, the combined pool of money in HFT is something that is secret. So noone really know what percentage of the market is determined by HFT. And noone really knows how close or far we are from things going wobly.

Noone wants these algorithms to get regulated, noone wants to prove that their algorithms will follow all the SEC rules. Since chances are that the black boxes have probably figured out that there is good money to be made in manipulating the price rater than predicting the price. And even if we never told the algorithm to do this, we also never told the algorithms not to do this.

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By: Alexandra http://blogs.reuters.com/commentaries/2009/07/30/wall-street-meets-the-matrix/comment-page-1/#comment-1500 Fri, 31 Jul 2009 11:09:52 +0000 http://blogs.reuters.com/commentaries/?p=1921#comment-1500 Yes, they say they provide liquidity but is it really true?
Providing liquidity means to buy stuff, if you sell stuff you are said to remove liquidity.
For every buyer there is also a seller and since computers trade with computers, computers are on both ends and liquidity is thus removed as quickly as it is ‘provided’.
Since no side will only buy or sell, they just exchange roles after some time.
Money than is made on exchanging the roles of buyer and seller, pocketing the commissions and fees and not worrying to much about the value of equity being traded. Keep in mind,however, this also works the same way for derivatives such as options.
This means that volatility is actually good for the algorithms, because money can be made by using these price swings. So if you can’t make money on the rising share price, you will make money on the options you are also holding.
In addition, I am pretty sure that the game is completely programmable and thus predictable. With these algorithms, you’ll simply know where prices are going to go – at least the companies who run the algorithms know.
This game is completely rigged in my view.

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