Are The Markets Rigged?

KeLo said:
And it has happened to HFT, as Craig Pirrong points out:

"In fact, HFT has followed the trajectory of any technological innovation in a highly competitive environment. At its inception, it was a dramatically innovative way of performing longstanding functions undertaken by intermediaries in financial markets: market making and arbitrage. It did so much more efficiently than incumbents did, and so rapidly it displaced the old-style intermediaries. During this transitional period, the first-movers earned supernormal profits because of cost and speed advantages over the old school intermediaries. HFT market share expanded dramatically, and the profits attracted expansion in the capital and capacity of the first-movers, and the entry of new firms. And as day follows night, this entry of new HFT capacity and the intensification of competition dissipated these profits. This is basic economics in action."
https://www.forbes.com/sites/timwor...y-trading-is-over-dead-its-done/#3d631b27dcf8
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Which provides an advantage to the likes of BATS who charges HFT's for feeds before the whole trade is executed. Isn't that similar to a casino charging well funded players a peek at the cards before they are dealt, so they can decide on their bets. I guess it depends on which side of the fence your sitting on, right. Per mortals can never use HFT, we wouldn't have the resources to get feeds from the likes of BATs or any matching and parsing engine.
 
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In the 60's it was fixed commissions and the proliferation of multual funds that was screwing up the market.
In the 70's it was SOES/RAES bandits that were screwing up the markets.
In the 80's it was the proliferation of financial derivatives and dynamic hedging that was screwing up trading.
In the 90's it was growth of ETFs and the beginning of rebate trading that was screwing up the market.
From 2000 on it was the HFTs, Dark Pools and the fragmentation of exchanges that was screwing up the markets,
Now it's HFT, private feeds, volatility products, data costs and 24 hour trading and the proliferation of technology that's screwing up the markets.

When you can't dance you gripe about your shoes not fitting, your shirt being too tight or your partner being a bad dancer.
Markets evolve and traders learn - volumes keep growing and clever people always will look for an edge. There is NO requirement to trade and there are Thousands of firms worldwide looking for proven traders
 
comagnum said:
Spread betting .. is betting. When you truly understand the hard math of trading you will know that spread betting is a mugs game.
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And also that there is no risk-free position, whether it’s naked, hedged, non-correlated, mean reverting, etc.....
 
Is all investing betting? From our perspective all speculation is considered betting. We are all speculators unless we own enough shares to sway company directors/direction. Label it way you like, who really cares as long as we make money. FYI we live in a capitalistic society, that's how it works...
 
Everything is...technically...rigged in society to favor the elite, and powerful and smart,
While the dumb, inexperienced sheep masses get stuck in nowhere land.

Besides, the only people who complain and moan about it are the people who happen to fall on the short end of the stick of the situation o_O, :confused:

In summary, improve your trading skill and wisdom. -- Be a Killer, in the market. A Killer,
The weak always die, it's been like that since the beginning of time. The weak live in Disneyland.
 
From a journalistic point of view, "Is the market rigged?" is a great question - sets up lots of debate, no easy quick answer, evidence for both viewpoints, some strongly held opinions apply.
But in practice for traders - irrelevant. Just trade what you see, not what you think.
 
lylec305 said:
Which provides an advantage to the likes of BATS who charges HFT's for feeds before the whole trade is executed. Isn't that similar to a casino charging well funded players a peek at the cards before they are dealt, so they can decide on their bets. I guess it depends on which side of the fence your sitting on, right. Per mortals can never use HFT, we wouldn't have the resources to get feeds from the likes of BATs or any matching and parsing engine.
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The answer seems obvious to me, don't try to compete in the HFTs time frame. Use a longer time frame.

BTW, if you have DMA, you have a speed advantage over those traders who do not have it.

Also see...
THE JOURNAL OF FINANCE • VOL. LXVI, NO. 1 • FEBRUARY 2011

"Does Algorithmic Trading Improve Liquidity?"

TERRENCE HENDERSHOTT, CHARLES M. JONES, and ALBERT J. MENKVELD∗

ABSTRACT
Algorithmic trading (AT) has increased sharply over the past decade. Does it improve market quality, and should it be encouraged? We provide the first analysis of this question. The New York Stock Exchange automated quote dissemination in 2003, and we use this change inmarket structure that increases AT as an exogenous instrument to measure the causal effect of AT on liquidity. For large stocks in particular, AT narrows spreads, reduces adverse selection, and reduces trade-related price discovery.
The findings indicate that AT improves liquidity and enhances the informativeness of quotes.
 
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KeLo said:
The answer seems obvious to me, don't try to compete in HFTs time frame. Use a longer time frame.
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You get an immediate fill?Ok, then what?HFT completely trading based on patterns or volume.
 
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