Who is RSJ ?
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Eurex Volumes Collapse
- Thread starter THE-BEAKER
- Start date
Who is RSJ ?
Eurex volumes down ? That's not what I read here :
http://www.securitiestechnologymonitor.com/news/deutsche-boerse-xetra-eurex-gains-29808-1.html
http://www.securitiestechnologymonitor.com/news/deutsche-boerse-xetra-eurex-gains-29808-1.html
The thread was referring to fixed income drops. But if you want evidence of stock vols dropping elsewhere see here
http://money.cnn.com/2012/01/19/markets/trading_volume/index.htm
or here
http://www.bloomberg.com/news/2012-...rterly-profit-slides-on-volume-plunge-1-.html
and most interestingly this set of charts showing how no one seems to be able to outperform the index these days, which ties in with the market being more efficient. Maybe hft is indeed killing the investment industry, you can't charge performance fees if you can't outperform. If no one can charge fees they close and the vols drop once more.
http://blogs.reuters.com/felix-salmon/2011/11/21/correlation-chart-of-the-day-hedge-fund-edition/
The hft firms' costs just keep rising on this race to zero, what used to be profitable in microseconds now only works in nanoseconds and that costs a lot more money to stay first. The hft guys I know working at such firms say their costs keep doubling on their colocation kit and the returns dropping.
Interestingly the one type of fund that does still return is the macro fund which in some way is what point and click traders actually are. I mean we may complain but we're still knocking out some pretty impressive returns compared to the rest of the industry.
Think about the average prop local with a 6 figure account, add in all the bells and whistles software and you need to knock out 50% a yr to cover your fixed costs and break even. Then you have to cover all those commissions on top at tens of grand a month, then you need to make enough for a decent salary or what's the point being here. We're all still doing that to some extent or we'd be gone.
http://money.cnn.com/2012/01/19/markets/trading_volume/index.htm
or here
http://www.bloomberg.com/news/2012-...rterly-profit-slides-on-volume-plunge-1-.html
and most interestingly this set of charts showing how no one seems to be able to outperform the index these days, which ties in with the market being more efficient. Maybe hft is indeed killing the investment industry, you can't charge performance fees if you can't outperform. If no one can charge fees they close and the vols drop once more.
http://blogs.reuters.com/felix-salmon/2011/11/21/correlation-chart-of-the-day-hedge-fund-edition/
The hft firms' costs just keep rising on this race to zero, what used to be profitable in microseconds now only works in nanoseconds and that costs a lot more money to stay first. The hft guys I know working at such firms say their costs keep doubling on their colocation kit and the returns dropping.
Interestingly the one type of fund that does still return is the macro fund which in some way is what point and click traders actually are. I mean we may complain but we're still knocking out some pretty impressive returns compared to the rest of the industry.
Think about the average prop local with a 6 figure account, add in all the bells and whistles software and you need to knock out 50% a yr to cover your fixed costs and break even. Then you have to cover all those commissions on top at tens of grand a month, then you need to make enough for a decent salary or what's the point being here. We're all still doing that to some extent or we'd be gone.
Quote from Occam:
Excellent point!
Just as floor traders were dragged into early retirement (or other jobs) a few years ago, so it goes for many point-and-click traders, and even some HFT's.
Although there are no doubt HFT "abuses" in various parts of the market, the effect of such "abuses" is far less deleterious to the (typical) previously successful trader than is increased efficiency brought on by electronic, open markets.
There's probably no wizard behind the curtain collecting all those "lost" profits -- the profits simply don't exist anymore. Market efficiency makes them unnecessary.
This efficiency is being returned to the economy in the form of reduced transaction costs, but real growth belongs to "emerging" economies these days, so the added efficiency won't be particularly visible in the "first world".
therein lies the debate - you mention ' market efficiency '.
i think the market is less efficient.
you try to buy and sell 10000 lots in bond futures and it takes 2 to 3 times more to fill the order.
how is that efficient.
its only efficient in hft reading the order and exploiting it.
that is not efficiency in my eyes thats cheating.
less retail comes back.
So you get 40 ticks instead of 15? Isn't that a good thing?
Isn't it a point that it's the humans that have left, and its just the HFT that remain? Instead of HFT taking over. I remember even back as near as 2010 it was over twice as thick, was more like the T-note, now its 0-200 on most levels. So where has everyone gone?
I think there are still plenty of opportunities in there. It's just more whippy, besides everyone whinges about what HFT does and can see when they are active.....so why not trade off that instead of whinging about it? After all, algos are still made by humans? Just something to think about.
Isn't it a point that it's the humans that have left, and its just the HFT that remain? Instead of HFT taking over. I remember even back as near as 2010 it was over twice as thick, was more like the T-note, now its 0-200 on most levels. So where has everyone gone?
I think there are still plenty of opportunities in there. It's just more whippy, besides everyone whinges about what HFT does and can see when they are active.....so why not trade off that instead of whinging about it? After all, algos are still made by humans? Just something to think about.
volume has not gone anywhere, most trading is happening in dark pools. http://en.wikipedia.org/wiki/Dark_liquidity the spread is still usually 1c on most stocks, there is still plenty of liquidity and big moves happening everyday in different stocks.