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[Same Lazy Element]

Also all the alphas are all commoditized now so margins are very small now (1-2 bps at most), the trend towards automation has sped up the commoditization of alphas (code has zero marginal cost of replication)

It's a tricky question. Since there is no more "fair and orderly market" obligation, there is a legitimate concern (which materialized more than once) that liquidity is there when you don't really need it and not there when you really do. Also, because of the quote and book depth volatility, the volatility gets exacerbated. If I was forced to give an answer, I'd say long-term investor is the net winner, especially with free trading and such. Short-term lower-turnover traders are definite losers.

The general idea, though, is that HFT is here to stay. We have to deal with it, same way as with other aspects of our daily reality (e.g. closed gyms and restaurants - thank you Bill de Blasio).

 

[Tradex]

Didn't specialists and pit traders do this for years. Computers today

You mean using technology to steal 1 penny 10 or 20 million times a day?

Keep in mind that HFT do not act as traditional market-makers. In fact they are not taking ANY position of their own , at all, they are simply front running trades between institutional counter-parties.

 

[pragmatic-trader]

It's a tricky question. Since there is no more "fair and orderly market" obligation, there is a legitimate concern (which materialized more than once) that liquidity is there when you don't really need it and not there when you really do. Also, because of the quote and book depth volatility, the volatility gets exacerbated. If I was forced to give an answer, I'd say long-term investor is the net winner, especially with free trading and such. Short-term lower-turnover traders are definite losers.

The general idea, though, is that HFT is here to stay. We have to deal with it, same way as with other aspects of our daily reality (e.g. closed gyms and restaurants - thank you Bill de Blasio).

Agree, long term investors are net winners, short term intraday scalpers losers. I see it as a positive that tech has made many of these scalpers unemployed though, it's a freeing up of human capital. Scalping, arbitrage, etc is a job better left to a computer. It's easily automated and a human has no business wasting their time with it (even though there remain some excellent human scalpers who make 8 figures annually although they're very rare), it's a net benefit to the economy to reallocate this labor to something more productive

 

[pragmatic-trader]

You mean using technology to steal 1 penny 10 or 20 million times a day?

Keep in mind that HFT do not act as traditional market-makers. In fact they are not taking ANY position of their own , at all, they are simply front running trades between institutional counter-parties.

That is absolutely false. HFT has inventory like any other trader, it's just a very short holding period and they attempt to hedge it if necessary. You speak with such confidence about a topic you know nothing about

 

[Tradex]

HFT has inventory like any other trader

Right, the inventory...

That's probably why research show that some aggressive HFT "traders" make over $45,000 (net profit) per day.

Yep yep yep, it must be the inventory, that's it.

 

[ChipShotTrader]

No, I have not nor would I opine on their character. My comment was primarily about the author (Scott Patterson) who has nearly zero clue about the world he's describing. That makes this books about as useful for understanding the equity market microstructure as watching Top Gun for understanding the US Air Force.

[edit] in fact, "Flash Boys" is a better book for that, which is saying a lot

I truly have NO idea about the author. I just found it bizarre, that as I was reading the book, I literally recognized the characters involved, which was a surreal experience, and made me understand a distant stage of my life. For all I know, he could be like Jack Schwager, at the right place, and at the right time (Commodities Corporation), and voila, you got the Market Wizards, and all its subsequent sequels. Shit, he is probably that guy, damn...

 

[Tradex]

I talked about Bloomberg and Reuters earlier (they are supposed to be the fastest financial platforms as far as news is concerned), here is a quick comparison:
https://www.investopedia.com/articl...cial-news-comparison-bloomberg-vs-reuters.asp

 

[ZBZB]

You can get a rebadged Reuter’s EIKON terminal for $99 a month from www.metastock.com some stories are headline only. Figures are real-time.

 

[guru]

Here is a comparison of various financial news services:
https://www.liberatedstocktrader.com/top-10-best-financial-stock-market-news-sources/

Obviously no list or comparison can be accurate since any service may be first to announce different things at different times.

 

[2rosy]

You mean using technology to steal 1 penny 10 or 20 million times a day?

Keep in mind that HFT do not act as traditional market-makers. In fact they are not taking ANY position of their own , at all, they are simply front running trades between institutional counter-parties.

using technology or anything to make a 1 penny 10 or 20 million times a day. There used to be an advantage to where one stood in the pit, how load one was, aggressive, ... Those still exist in other ways.

I heard the argument of front running but never see it in practice or even explained on how to do it. Can you explain how to front run exchange traded securities?