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2014-07-16 8:48 AM

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Elite
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Subject: HFT's providing Liquidity
http://www.nanex.net/aqck2/4661.html

I find this stuff interesting. I thought I'd share it if anyone else is interested.


2014-07-16 9:56 AM
in reply to: JoshR

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Master
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Subject: RE: HFT's providing Liquidity

I'm sure the computer algorithm did some research on Ford, looked at its finances, upcoming product lines, employee relations, etc. and decided that its prospect for sustained growth and returns in the near and long term looked promising and decided to invest its money in the company in that 80 milliseconds.  Because that's what the stock market's for, right?  Linking up investors with money with companies seeking capital.  Just because HTF pay for special access to the exchanges so they can get their trades in before everyone else doesn't make it shady at all...  

2014-07-16 11:19 AM
in reply to: JoshR

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Subject: RE: HFT's providing Liquidity
That's good stuff, thanks for posting. They aren't nicknamed "banksters" for nothing.
2014-07-21 5:32 PM
in reply to: drewb8

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Subject: RE: HFT's providing Liquidity

Originally posted by drewb8

I'm sure the computer algorithm did some research on Ford, looked at its finances, upcoming product lines, employee relations, etc. and decided that its prospect for sustained growth and returns in the near and long term looked promising and decided to invest its money in the company in that 80 milliseconds.  Because that's what the stock market's for, right?  Linking up investors with money with companies seeking capital.  Just because HTF pay for special access to the exchanges so they can get their trades in before everyone else doesn't make it shady at all...  

This has been happening since the stock markets opened.  It's not new.  It happened in open outcry as well.  Doesn't necessarily make it ok of course.

 

2014-07-22 7:04 PM
in reply to: JoshR

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Subject: RE: HFT's providing Liquidity
Did you read Flash Boys by Michael Lewis? Very entertaining.... although I am not shedding tears that Goldman got f'ed... they're the bottom for once.
2014-07-23 4:51 PM
in reply to: mcgilmartin

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Subject: RE: HFT's providing Liquidity

This is of course a microscopic example of trading not being a level playing field, but I'm equally as convinced that the same crap goes on over much longer periods of time.

I've gone on and on about the market being rigged and the "buy and hold" method of long ago just isn't a realistic method for investing anymore.  Things like this just reinforce my beliefs.  :-/



2014-07-24 11:10 AM
in reply to: tuwood

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Champion
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Subject: RE: HFT's providing Liquidity
Originally posted by tuwood

This is of course a microscopic example of trading not being a level playing field, but I'm equally as convinced that the same crap goes on over much longer periods of time.

I've gone on and on about the market being rigged and the "buy and hold" method of long ago just isn't a realistic method for investing anymore.  Things like this just reinforce my beliefs.  :-/




Sad thing is I bet more money is made by people who find a angle to manipulate the market than person who is investing in a company long term because they believe in the company and there growth.
2014-07-24 12:03 PM
in reply to: chirunner134

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Subject: RE: HFT's providing Liquidity

Originally posted by chirunner134
Originally posted by tuwood

This is of course a microscopic example of trading not being a level playing field, but I'm equally as convinced that the same crap goes on over much longer periods of time.

I've gone on and on about the market being rigged and the "buy and hold" method of long ago just isn't a realistic method for investing anymore.  Things like this just reinforce my beliefs.  :-/

Sad thing is I bet more money is made by people who find a angle to manipulate the market than person who is investing in a company long term because they believe in the company and there growth.

I guess you could "kind of" throw me into this bucket because the market trends up and down so consistently that I make weekly swing trades based on the up and down swings using option contracts to leverage the return 100:1.

I don't care if the market is going up or down, I just like it to consistently swing as it's doing it.

It's certainly not a manipulation thing on my part because there are thousands of people that do this type of trading, but it's completely indifferent of company value and growth.  It's all about technical swings on the market.

2014-07-24 11:11 PM
in reply to: tuwood

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Subject: RE: HFT's providing Liquidity
Originally posted by tuwood

Originally posted by chirunner134
Originally posted by tuwood

This is of course a microscopic example of trading not being a level playing field, but I'm equally as convinced that the same crap goes on over much longer periods of time.

I've gone on and on about the market being rigged and the "buy and hold" method of long ago just isn't a realistic method for investing anymore.  Things like this just reinforce my beliefs.  :-/

Sad thing is I bet more money is made by people who find a angle to manipulate the market than person who is investing in a company long term because they believe in the company and there growth.

I guess you could "kind of" throw me into this bucket because the market trends up and down so consistently that I make weekly swing trades based on the up and down swings using option contracts to leverage the return 100:1.

I don't care if the market is going up or down, I just like it to consistently swing as it's doing it.

It's certainly not a manipulation thing on my part because there are thousands of people that do this type of trading, but it's completely indifferent of company value and growth.  It's all about technical swings on the market.



would not throw you in that bucket at all. you found a system that is profitable for you. I don't know your wealth but I would say your a grain of sand in the investment community. your options are not going to influence the markets one way or the other. However, the big players know how to play and control a stock...upside/downside. Look at PUMA yesterday. Who's the poor sucker that bought at $241 a share?
2014-07-25 8:29 AM
in reply to: rayd

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Subject: RE: HFT's providing Liquidity

Originally posted by rayd
Originally posted by tuwood

Originally posted by chirunner134
Originally posted by tuwood

This is of course a microscopic example of trading not being a level playing field, but I'm equally as convinced that the same crap goes on over much longer periods of time.

I've gone on and on about the market being rigged and the "buy and hold" method of long ago just isn't a realistic method for investing anymore.  Things like this just reinforce my beliefs.  :-/

Sad thing is I bet more money is made by people who find a angle to manipulate the market than person who is investing in a company long term because they believe in the company and there growth.

I guess you could "kind of" throw me into this bucket because the market trends up and down so consistently that I make weekly swing trades based on the up and down swings using option contracts to leverage the return 100:1.

I don't care if the market is going up or down, I just like it to consistently swing as it's doing it.

It's certainly not a manipulation thing on my part because there are thousands of people that do this type of trading, but it's completely indifferent of company value and growth.  It's all about technical swings on the market.

would not throw you in that bucket at all. you found a system that is profitable for you. I don't know your wealth but I would say your a grain of sand in the investment community. your options are not going to influence the markets one way or the other. However, the big players know how to play and control a stock...upside/downside. Look at PUMA yesterday. Who's the poor sucker that bought at $241 a share?

Yeah, I typically have less than $2500 at a time of actual cash tied up in my individual swing trades.  Due to them being option trades I get huge profit swings on that money, but I think I'm less than a spec of sand in the overall option market.  :-D

2014-07-25 9:52 AM
in reply to: tuwood

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Subject: RE: HFT's providing Liquidity
Tuwood I know you play the game in a more ethical manner.



2014-09-29 9:07 AM
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Subject: RE: HFT's providing Liquidity
I admit to not reading the whole link, but there is possibly another side, a pro-hft side. What price would be available for that stock, and how many shares would be available if we went back to open outcry? Would a market maker on the floor sell 20,000 shares at his/her best price back in the old days?
The HFT guys claim there is much more lidquidity and much tighter pricing because of them- the link claims that's a lie, but I gottta think there's some benefit...

The link also makes this claim :

that none of this would be possible if the direct feeds weren't illegally supplying HFT with faster information than the SIP. "illegally" seems a bit strong. If all parties have access to the data (albeit, expensive data), how is it illegal?

Edited by ried0428 2014-09-29 9:11 AM
2014-10-03 5:56 PM
in reply to: ried0428

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Subject: RE: HFT's providing Liquidity

Originally posted by ried0428 I admit to not reading the whole link, but there is possibly another side, a pro-hft side. What price would be available for that stock, and how many shares would be available if we went back to open outcry? Would a market maker on the floor sell 20,000 shares at his/her best price back in the old days? The HFT guys claim there is much more lidquidity and much tighter pricing because of them- the link claims that's a lie, but I gottta think there's some benefit... The link also makes this claim : that none of this would be possible if the direct feeds weren't illegally supplying HFT with faster information than the SIP. "illegally" seems a bit strong. If all parties have access to the data (albeit, expensive data), how is it illegal?
 

HFT provides a liquid market only when it suits HFT traders.  When something goes down and they get out the resulting market impact is huge.  If you've got orders in there with stop losses, you're getting sold, yet you might find the price return in a few seconds.  This is what happened on the NYSE a couple of years ago.  

So the HFT claims are true but not complete - the real problem is they're not obligated to be there all the time.  Then again, even paid for market makers only have to be making prices 90% of the time so plenty of wiggle room to get out in times of strife.

It's not illegal and it's not against exchange rules to get access to information faster than others as long as everybody has the opportunity to get access to that data (if they can afford it).  Some of the ways that data is subsequently used may be against the rules (spoofing, layering).  But even then, those terms are not clearly defined (no point, technology moves too fast to make a definition workable) that it's hard to pin someone down.  

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