Comments on: Judging high-frequency trading

By: EllieKim

EllieKim — Tue, 12 Mar 2013 15:13:52 +0000

This and other topics that are relevant for speed traders and institutional investors will be discussed at High-Frequency Trading Leaders Forum 2013 London, next Thursday March 21.

By: Finance

Finance — Thu, 26 Nov 2009 08:42:27 +0000

High-frequency trading will improve market liquidity as there are always buyers or sellers available in the market when the investors want to trade.

By: Scott Locklin

Scott Locklin — Wed, 05 Aug 2009 19:00:49 +0000

HFT is actually very easy to understand. It’s providing liquidity. People make it into this crazy buck rogers thing, but it ain’t. If you want to learn something about it, Larry Harris’ book is a good one.

By: aNewEraBegins

aNewEraBegins — Wed, 05 Aug 2009 13:53:55 +0000

As if they had any other choice but to clamp down on it! Most people don’t know exactly how flash trading works yet they still clearly need someone to blame for why things are so bad right now. Because all these people can’t seem to finger the real culprit (the gov’t) due to obesity, food additives, apathy, the un-education of America, 150 milltion of them on pharmaceuticals, 30 milltion on food stamps, 30 million on anti-depressants, and 4 million in prison (fed+state+county)……… I guess they’ll have to slap somebody on the wrist for pillaging their 401k’s and feel REALLY good about getting the “bad guy” just like an old John Wayne movie.How does program trading work? Check it out. Are you ready? A New Era Begins…..http://www.youtube.com/watch?v= VRhyWZnGjyc

By: Trader

Trader — Sat, 01 Aug 2009 09:43:38 +0000

Are you all morons? You can limit HFT in time limits and taxes. The problem is you will kill the markets!Market makers and HFT in general makes tha market more efficient and killing them will make them a lot less efficient and drive retail investors out to trade in other countries where stupid rules do not exist.

By: MF

MF — Fri, 31 Jul 2009 05:30:23 +0000

it’s not hft that poses the risk. it’s fi’s using flash orders as part of their hft (to allow these traders to front run) that poses the risk to the capital markets and to all investors.the ny ag needs to get involved and subpeona for transactional data because there is a risk of white-collar crime involved. can’t leave this issue solely to the SEC because they have a terrrible track record (i.e. Madoff, Stanford, ratings agencies, MBS).at a minimum, two things need to happen: 1) fi servers need to be moved outside of the exchanges (can’t be convinced that the loss of a couple of seconds will seriously deteriorate liquidity), and 2) exchanges should not be allowed to police compliance on this issue (they have a financial stake in hft and thus have a conflict of interest).

By: jonathan

jonathan — Thu, 30 Jul 2009 15:45:50 +0000

If HFT generates such a high percentage of all trading, that’s an argument for restricting it. This gets back to the liquidity argument because that form of liquidity is mostly an illusion which gives the impression that spreads are small, which misleads about real levels of demand, risk, etc.

By: david

david — Thu, 30 Jul 2009 14:58:27 +0000

explain to me what would be wrong with limiting all trading intervals to 10-seconds, thereby tossing maybe 10-25% of investment banking employees out on the street, and eliminating a large tax on small investor profits?

By: ZT

ZT — Thu, 30 Jul 2009 14:13:20 +0000

Felix Solomon is a moron. The HF trade generated 20 billion last year however stating that GS is twenty percent of the market shows how misinformed he is. In terms of prop HF (which most of the P&L is generated from), GS was not even a top ten player. Rentec, Getco, Citadel, Tower, and Quantlab accounted for at least a third of the total figure.Also, I find it fascinating that Felix and others are crucifying HFT this year. The trade is off by at least thirty percent (across asset classes), if not more. It has become overcrowded and guys are cutting into each others profit margin (just like stat arb five or six years ago)In terms of long term investors, please define long term? Amazon, Apple, and a variety of other well run companies have performed well over the past few years. Good companies have good performance. Just because one invests in a stock that they believe is a good long term play, does not mean it is a good long term play. If you want guaranteed returns, start buying munis and quit complaining.

By: PG

PG — Thu, 30 Jul 2009 13:16:55 +0000

There’s a lot of confusion and misinformation out there re: what is HFT. First of all, HFT isn’t based on flash orders. Flash orders are an order type, and it’s pretty useless to most HFTs unless you’re a rebate trader in super-tight spread stocks. It’s true that it’s a way to remain complaint with reg NMS. Also, co-located computers don’t see orders BEFORE they hit the market, and don’t front-run, they just get the public data faster than higher-latency strategies, though for a long-term investor, the latency is meaningless. If you want to point fingers at those who see order before the public, look no further than specialists on the NYSE! They absolutely trade based on what they see in their book, all in the name of “providing a fair and orderly market”. What’s fair about that?If it’s true that HFTs represent 70% of volume (based on what NYT article says), if you take out that volume, what do you think that will do to spreads? It’s very interesting to note that some of the biggest opponents of HFT (like Joe Saluzzi of Themis Trading) stand the most to gain if spreads get bigger again.If a widely used strategy poses a systemic threat, it should most definitely be looked into; however, most HFTs have competing strategies with varying timescales, and pretty much just make/lose money amongst each other, not off the “little guy”. If GS is watching their customer orders come in and making trades ahead of those, that’s a completely different issue, and they should most certainly be punished for that.Let’s put our pitchforks down and stop trying to find a villain. I think we can all agree that everyone in the country played a role in the economic state in which we currently find ourselves. People spent money they didn’t have, bought houses they couldn’t afford, and now want someone to blame. Look in the mirror, stop whining, and be productive.

By: Rob

Rob — Thu, 30 Jul 2009 13:16:29 +0000

Your $100mm/day figure for GS is way off. They made approximately this much off ALL their proprietary trading operations, but not HFT alone.Also, once you quoted ZeroHedge, your credibility went down to practically zero. Have you read that site? It’s a bunch of novice investors looking for conspiracy theories in every single market event.

By: Lilguy

Lilguy — Thu, 30 Jul 2009 11:52:17 +0000

Here I have to agree with ZH–The high-frequency shenanigans of the GSs of the world are driving me out, and I’ve been investing in stocks for four decades. HFT–and more specifically, front running–combined with a growing multitude of other deceptive and corrupt business practices among the exchanges, the principal traders, and the companies that I could be investing in all turn strategic stock investment into a sucker’s game for the little guy.I don’t need it. When the SEC, CFTC, etc ad nauseam, can bring transparency, a level playing field, and integrity to the markets and the companies in them, I’ll consider re-entering.

By: Peter

Peter — Thu, 30 Jul 2009 07:21:20 +0000

Having just read Paul Wilmott’s article he claims the major concern with HFT is the number of institutions all doing/not doing the same process at the same time.If this is a concern then the nubmer of banks using the same VaR method must also be a major concern. Using the same historical data set and the same number of standard deviations to adhere to regulatory authorities risk measurements causes a similar issue. All selling when the market is going down and all buying when the market is going up.The VaR issue makes the HFT issue as raised by Wilmott pale in comparison.

By: beezer

beezer — Wed, 29 Jul 2009 19:45:37 +0000

Slipping into the que at the front, all of the time, is not a random event but one that is manufactured.Just because one can do this is not sufficient reason to allow it. Particularly in what is supposed to be a free market where all honest participants are protected from manipulation.Under Bush the SEC disgraced itself by looking the other way. I was hoping Obama’s SEC would end such obvious manipulation of what is supposed to be a level playing field.

By: Rockfish

Rockfish — Wed, 29 Jul 2009 19:20:24 +0000

My understanding is that some firms get access to orders in advance of the “public”. Even though one may argue that this information is available to anyone willing to pay the “fee,” I don’t see this as any different from a CEO auctioning off advance information to the highest bidder.Why is one illegal and the other not?Secondly, if, as was noted in some articles, these trading programs can in essence create a “false” market to sniff out other’s price thresholds, why isn’t this illegal?This is not my area of expertise, but it sure fails the “if it quacks like a duck ” test.