Are Retail traders being squeezed out

Darc

Darc

The regulatory bodies allowing Dark Pools, HFTs, ETFs not reflective of the Market messing up Market breadth, the list goes on. Seems to be us Retailers are being squeezed.

The Governments of the Day (Political parties) are always going to be influenced by their Campaign donors who are the big Players, so their interest will be served before the humble Retail battlers.


(This is meant to be an Educational thread, not an entertainment one. Can we please keep the trolling until at least page 3, thanks).
 
Darc said:
The regulatory bodies allowing Dark Pools, HFTs, ETFs not reflective of the Market messing up Market breadth, the list goes on. Seems to be us Retailers are being squeezed.
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can you explain how Dark Pools, HFTs, ETFs not reflective of the Market messing up Market breadth affect retail?
Also, what are ETFs not reflective of the Market messing up Market breadth?
 
Darc said:
The regulatory bodies allowing Dark Pools, HFTs, ETFs not reflective of the Market messing up Market breadth, the list goes on. Seems to be us Retailers are being squeezed.

The Governments of the Day (Political parties) are always going to be influenced by their Campaign donors who are the big Players, so their interest will be served before the humble Retail battlers.


(This is meant to be an Educational thread, not an entertainment one. Can we please keep the trolling until at least page 3, thanks).
More...
How could an ETF be anything but reflective?
 
I'm not arguing with you, but I think the market always relies on retail. It's a transfer of wealth from me to those who know what they are doing. I don't think the system is rigged and there will always be retail traders ( a small minority) who figure it out and build a small fortune.
 
S2007S said:
Markets are basically algorithms trading vs other algorithms, ...if you knew how these markets actually traded you wouldn't want to even touch them ...
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I was reading that pre 2016 Index volume was 38% HFT arbitrage. I assume its more now.
 
None of this stuff really impacts retail. On the +ve side, it means you pay smaller commissions.

It does impact large investors (institutional investors). A stocks market is made up of supply and demand. Here's a simplified overview:

On your screens, you can see the aggregate "lit" supply and demand. If you calculate the dollar value of this, you'll see that it's actually not very much. Historically, the depth of market has declined since reg nms in the early 2000s. This is mainly because decimalization allowed faster traders (high frequency trading firms) to outcompete market makers (primarily big banks and wirehouse firms). Today, all market makers are HFT, and banks operate internal HFT systems for high-touch customers.

When a large investor needs to trade, they typically are starting with a size around 10k shares and even "normal" trades can exceed 100k shares. HFT and other traders try to "soak up liquidity" by buying shares when they notice a large trader in the market -- they do this to bid the price up/down depending on the direction of the trader. Large traders call this "transaction cost" and "slippage" and try to minimize it.

To do that, buy side traders estimate the market impact of their trades and use their broker network to source liquidity. They typically need to access liquidity from multiple venues, including crossing through banks, filling in a dark pool, and sweeping displayed liquidity. However, their strategy can vary depending on how aggressive the portfolio manager wants them to be on acquiring a stock.

So.. again, not really a big deal for retail traders.
 
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