Fragmentation of liquidity is clearly a major issue, as you say.
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Charlie Munger, 90 years old , and smarter than 100 of you put together
- Thread starter stock777
- Start date
Agree with Munger.
One day this will be talked about...documentaries will be made and books written on it .....they will bring this issue to light well after the fact that it has created havoc on the system, but until then hft's will continue to do what they do with zero rules in place....isn't that how wallstreet always plays.
No one cares about daytraders, HFT is so short term that it's not supposed to affect longer term players. It's events like May 6 2010 that create the real problem; systemic market instability caused by complete automation. As long as we can prevent this, no reason to believe that HFT won't continue to be a viable strategy.
Quote from S2007S:
One day this will be talked about...documentaries will be made and books written on it they will bring this issue to light well after the fact it created havoc on the system, but until then hft's will continue to do what they do with zero rules in place....isn't that how wallstreet always plays.
Quote from Grandluxe:
I am not sure if HFT is the cause of the retail volume demise and hindering price discovery. Rationally speaking, Dark Pools and Broker internalization seems to play a bigger role.
WORD - Dark pools are just insane. There are some that only huge players like banks and hedgefunds have access to. The stockmarket has become so rigged, it's really a big joke.
Quote from Triple X:
WORD - Dark pools are just insane. There are some that only huge players like banks and hedgefunds have access to. The stockmarket has become so rigged, it's really a big joke.
I'm a noob on this topic, but is the advantage of dark pools just more liquidity and better average prices? How much better are the prices, it can't be more than +- 1% right?
it seems like the only way to fix this problem is to just make dark pools illegal. Gambling is only allowed in certain places so they just should do the same with trading of stocks.
Also the whole front running thing seems silly to call out. The term has existed for 100+ years probably because the act of it has existed for just as long. Why is this now the big issue for Munger? weird..
Spot on.
HFT is mostly legalized front-running. Fuck them. Put them out of business.
They're parasites. Nothing more.
HFT is mostly legalized front-running. Fuck them. Put them out of business.
They're parasites. Nothing more.
Quote from achilles28:
Spot on.
HFT is mostly legalized front-running. Fuck them. Put them out of business.
They're parasites. Nothing more.
OK. Who will take the other side of your trade then?
Here is little help to understand the problem: The money to cover market valuation of all securities issued and currently traded have not been printed yet.
You need somebody to create artificial liquidity to create illusion that there is buyer/seller in the market and HFT fills the VOID.
They are not going to do it for free because there is cost and risk to it.