Eliminating Spoofing = making bluffing illegal

HFT are NOT market makers. and don't have the advantage of a 'designated market maker'

HFT are just professional traders/investors in the exchange.

they are just 'high frequency' traders.. or active traders. retail investors maybe make 1 trade or investment per quarter. and guys like pension funds, mutual funds or guys like soros, buffet have no use for the exchanges 'open market' and don't trade or invest in the exchange at all.

the average mom and pop retirement investment accounts make 1 trade per quarter? 90% of the exchange volume or business is active traders or high frequency traders...high frequency is just a industry lingo for "active trading".




cjbuckley4 said:
Cancelling orders doesn't imply that the orders were initially places without the intention of them being executed.

HFTs are trying to make markets. To make money as a market maker, you need to be able to cross the spread before the market moves against you. They need good queue position in order to do this, so they send orders tactically at several levels on either side to maintain good queue position before the market actually reaches them. If price reaches that level but it's no longer a trade that the market maker wants to take, they cancel the order. They fully intend to execute the order when they place it, but something along the way convinces them that they're unlikely to capture the spread or that they have too much inventory representing a similar directional bet on a given security, so they simply cancel. There is no attempt to mislead other participants here and nothing manipulative about this activity, unlike spoofing.

Exchanges like CME provide mass quoting in their protocols to facilitate market makers doing exactly this without it counting against them in the Efficient Messaging Ratio calculation--one of the rules put in place to discourage manipulative practices like layering--a form of spoofing that people who know what they're doing prefer to spoofing because it's more deceptive and easier to defend as a legitimate market making tactic. There are a myriad of other accommodations made by exchanges to encourage market makers and make sure they provide continuous liquidity because it leads to more fair markets.
More...
 
Guile said:
Nobody at Jump will ever face a serious punitive action
More...

I don't know what you consider serious punitive action. But a trader at Jump actually did get hit a year or so ago with a spoofing charge. James Chiu

And here is another problem. There is no clear cut definition of HFT. You are saying it means writing direct to an exchange. Someone else says a high cancel rate, someone else says a lot of orders. When it is this wishy-washy, people can bend it the way that fits their needs. I think we just need to get off this whole HFT business. And just go after people spoofing. HFT or not.
 
he was trying to fool other market participants with his games even though spoofing has no effect on the market.

SPOOFING Doesn't WORK either. so he got fined for spoofing even though it has no effect on the market.

it's like like shill bidding in an auction.

shill bidding has no effect on the price either. you may have people buying it but price is the same with or without shill bidding.


Rum Runner said:
I don't know what you consider serious punitive action. But a trader at Jump actually did get hit a year or so ago with a spoofing charge. James Chiu

And here is another problem. There is no clear cut definition of HFT. You are saying it means writing direct to an exchange. Someone else says a high cancel rate, someone else says a lot of orders. When it is this wishy-washy, people can bend it the way that fits their needs. I think we just need to get off this whole HFT business. And just go after people spoofing. HFT or not.
More...
 
In accordance with the settlement offer, the Panel ordered Chiu to pay a $155,000 fine, and to serve a two month suspension from membership privileges on any CME Group Inc

http://www.cmegroup.com/tools-infor...y/CME-10-7599-BC-JAMES-CHIU.html#pageNumber=1

IIRC Panther trading (aka that dude with a custom TT server) had to disgorge all of his profits.
I'm sure James Chiu will be back at Jump after 2 months. That's why I call bullshit. Some firms have clear political advantages which act synergistically with their existing tech advantage.
Shenanigans. Shenanigans goddamnit!
 
privatebrokers said:
HFT are NOT market makers. and don't have the advantage of a 'designated market maker'

HFT are just professional traders/investors in the exchange.
More...
This true to a degree, not all HFTs are market makers, but many HFT companies' bread and butter is market making. You don't need to be a DMM to make a market. Anyone who uses a limit order is adding liquidity, anyone who quotes both sides has made a market.
 
Rum Runner said:
And here is another problem. There is no clear cut definition of HFT. You are saying it means writing direct to an exchange. Someone else says a high cancel rate, someone else says a lot of orders. When it is this wishy-washy, people can bend it the way that fits their needs. I think we just need to get off this whole HFT business. And just go after people spoofing. HFT or not.
More...

And here is another problem. There is no clear cut definition of spoofing. You are saying it means trading without intent. Someone else says a high cancel rate, someone else says a lot of orders not near the best bid or ask. When it is this wishy-washy, people can bend it the way that fits their needs. I think we just need to get off this whole spoofing business. And just go after people HFTing. Spoofing or not.

See what I did there? My paragraph is just as valid as yours.
 
sprstpd said:
And here is another problem. There is no clear cut definition of spoofing. You are saying it means trading without intent. Someone else says a high cancel rate, someone else says a lot of orders not near the best bid or ask. When it is this wishy-washy, people can bend it the way that fits their needs. I think we just need to get off this whole spoofing business. And just go after people HFTing. Spoofing or not.

See what I did there? My paragraph is just as valid as yours.
More...

I don't think that is my definition. I'm pretty sure that is the definition from the people who enforce the rules.
 
You must log in or register to reply here.
Back
Top