Comments on: High frequency trading as a liquidity tax http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Meeke http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/comment-page-1/#comment-5101 Thu, 06 Aug 2009 20:14:40 +0000 http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/#comment-5101 Did I get the definition of HFT right?

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By: Candy Chiu http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/comment-page-1/#comment-4771 Wed, 29 Jul 2009 23:25:44 +0000 http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/#comment-4771 Specialists are humans, and there’s only one specialist/stock. People who understand the specialist can take advantage of it even though they can’t afford a supercomputer. HFT is a mushroomed specialists systems which constantly tax investors. It should be banned.

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By: jonathan http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/comment-page-1/#comment-4749 Wed, 29 Jul 2009 15:19:56 +0000 http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/#comment-4749 What debate? Everyone with any moral sense at all knows this is wrong. Indefensibly wrong.

Example: the commenter who asks if we should go back to telephones and paper. That has nothing to do with this form of trading. If you can’t understand that, you should a) take a course on the concept of logic and b) attend some religious service somewhere to learn basic concepts of morality.

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By: jonners http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/comment-page-1/#comment-4748 Wed, 29 Jul 2009 14:59:42 +0000 http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/#comment-4748 Cmon felix, you’ve been called on your numbers. Put up your dukes or fold. Or does your respected requirement for rigor only apply to other journos?

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By: ab http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/comment-page-1/#comment-4744 Wed, 29 Jul 2009 13:01:49 +0000 http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/#comment-4744 I’d like to see how this number compares to the aggregate profits of floor traders (i.e. market makers) before everything went electronic. Would guess these are actually lower.

More importantly, it really shouldn’t matter to us who “captures” the profits from trading. In the end it’s still all about the proper allocation of capital. As long as these HFT programs don’t scare away other investors (with real information), they’re just part of the transaction costs (and again, this is probably lower than in the past).

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By: JoshK http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/comment-page-1/#comment-4743 Wed, 29 Jul 2009 12:36:43 +0000 http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/#comment-4743 1. The 20b is accross all markets and only a small slice is b/c of hi-freq equities trading.
2. Hi-freq equities trading is replacing the old world of the brokers. When you have an order to do, say buy 50k IBM, you send that to a broker, and then they send that to an algorithmic system. Commissions are down b/c of this.

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By: jck http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/comment-page-1/#comment-4742 Wed, 29 Jul 2009 10:48:35 +0000 http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/#comment-4742 At least “credulous” Bloomberg got something right: “The firms compete for a slice of $21.8 billion in annual profits from equities and derivatives market making and arbitrage, according to Tabb.”
i.e. HFT is no way near $20 billion a year.

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By: Dan http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/comment-page-1/#comment-4741 Wed, 29 Jul 2009 08:20:04 +0000 http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/#comment-4741 The submission and cancelling of fake orders in order to gain knowledge of the intentions of others is a type of securities fraud. Folks should be prosecuted for that just as they would be prosecuted for insider trading or pump-and-dump schemes.

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By: Daniel Sorid http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/comment-page-1/#comment-4734 Wed, 29 Jul 2009 01:31:42 +0000 http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/#comment-4734 Glad to see the thoughtful analysis here, but did it really need to begin with flogging an article of your employer’s arch-rival? Calling the Bloomberg story “rather credulous” in the introduction and asking Stokes to “translate” a Bloomberg paragraph “into English” seemed rather petty. That is, unless you’ve applied the same treatment to a deserved Reuters article?

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By: jonners http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/comment-page-1/#comment-4731 Wed, 29 Jul 2009 00:36:35 +0000 http://blogs.reuters.com/felix-salmon/2009/07/28/high-frequency-trading-as-a-liquidity-tax/#comment-4731 I work in a bank which takes great pride in the quality of the algo execution tool it provides to it’s clients to help them manage their execution and have a high degree of control over pricing. Should we really go back to telephones and oder limits? Why not go the whole way and insist on open outcry?

This feels like an old school technology lash-back and the commie statement is relevant (no-one should have I-phones unless you give them away for free, it creates a multi-tiered society?). Further, the level of understanding in most of these articles is frustrating. The term coined HFT is a pejoritive but I doubt many realise that.

While all systems are open to abuse and allowing GS access to other particpants trading information pre-execution sounds unforgivable, electronic trading is not itself the bogeyman.

Further, the quoted 20bn feels like one of those counterfeit statistic numbers, what’s your source here Felix, is it reliable?

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