hey HFT scum, yeah, you. Watch this

"It's sad that people can't see the forest for the trees and have to look for a boogeyman behind every corner".

Uh yeah!!!!!!

Boogah boogah. :p
 
Quote from stock777:

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I was referring to winston the hft smoker. You're not him using an alias are ya>
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777 you really don't have a clue. I'm not even in HFT. Its very very funny that you hate on people that you have no clue about. I work with a lot of very talented people who have lots of experience and I could care less about you trolling from your parent's basement. There are people in this thread giving good, valid/true information and you are ruining it. Its sad really.

Machines/boxes make markets more efficient. HFT is one of the most misunderstood, misused term on this forum (if not everywhere). The difference between automated trading and HFT/Flash Trading is like the difference between manual trading over fast internet (today) and calling trades into a broker in the 1960's.

If more people understood how far we have come in the last 20 years and how much more efficient the markets are now vs. then it would be a totally different ballgame. I used to work for a "state of the art" broker (Brown Co) where I sat next to a dot-matrix printer that printed out short sale tickets on pink sheets of paper. We would manually tear the sheets off the printer, log into the customer's account, check the balance & credentials, enter the order for them and hand-sign the ticket - all with a goal of "execution under two minutes". This was only a few years ago. Think about what would happen if you placed a trade on your retail account and had to wait up to two minutes for a fill. Think about how far the markets could run against you or how much time a broker could have to front run you if you had two minute fills. If you think this is bad just be glad you weren't calling a broker in a pit 25 years ago.
 
I'm ruining my own thread? By posting evidence from third parties that the HFT community are criminals?

The whole purpose of HFT is to frontrun EVERYONE ALL THE TIME. Is that simple enough for ya?


You are a pitiful apologist , fooling no one.
 
Quote from WinstonTJ:

No, it isn't.
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Hi WinstonTJ,

Do you mind putting your own explanation about what HFT really is.

Some of their strategies:

* Market Making: They place, and rapidly edit, limit orders just outside the bid/ask spread of stocks in order to arb these disparities. Remember they do these edits and adjustments many times per millisecond.
* Statistical Arbitrage: Many traders are familiar with convergence trades, where two securities deviate from their historical pattern and as the deviation corrects itself, money can be made by shorting the one that is likely to come down and going long the one that’s likely to revert up. Statistical arbitrage is the same, except they do it with 4 or more variables, at the speed of light.
* Low-latency Trading: Provide bids/asks to their own algorithmic trading platforms much much faster than anyone else. Kind of like a first-mover advantage, where milliseconds matter.
* Liquidity Detection: This one pisses a lot of people off, and may be regulated out. They sniff out the potential for large blocks coming behind small trades. Nothing new or wrong about that, except that there is evidence that the HFTs have access to superior data (and get it earlier) than is more broadly available. So, by pinging immediate fill or cancel orders (often in dark pool trading exchanges that most people don’t have access to), they can identify when a big seller, say a mutual fund, is making a move. Then they can immediately buy up all offered shares for that, and resell them at a higher price than would have been available if they weren’t there. Some say that specialists have done this for years, but the fact that it’s now done at speed of light seems to make an unfair practice borderline criminal (sorry for editorializing...).
* Flash Orders: Apparently, (according to Themis) HFTs have superior access to data streams provided by exchanges. Because of this, they can act accordingly, milliseconds before anyone else... which is all the time they need. This is a hotly contested area, though regulators do not seem to understand or have appetite to address it.

Thanks,
redduke

P.S. the above is not my writing, just pasted it here
 
Quote from RedDuke:

* Market Making: They place, and rapidly edit, limit orders just outside the bid/ask spread of stocks in order to arb these disparities. Remember they do these edits and adjustments many times per millisecond.
* Statistical Arbitrage: Many traders are familiar with convergence trades, where two securities deviate from their historical pattern and as the deviation corrects itself, money can be made by shorting the one that is likely to come down and going long the one that’s likely to revert up. Statistical arbitrage is the same, except they do it with 4 or more variables, at the speed of light.
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If all HFT players were "just outside the bid/ask spread", what would the bid/ask spread BE? You're wrong. The dominant HFT strategy is liquidity provision, where pricing is done in many different ways, including with full knowledge of the execution mechanics of the routing destinations. But the only time it makes sense to avoid being the best bid/ask is when trying to take advantage of liquidity takers using sweep executions. And they get what they deserve for doing that.

4 or more variables = whatever, it could be 1 or 100. At the speed of light? Funny, I thought we were all still bound by the laws governing the electrical resistance properties of silicon and copper. Guess I'm behind.

* Low-latency Trading: Provide bids/asks to their own algorithmic trading platforms much much faster than anyone else. Kind of like a first-mover advantage, where milliseconds matter.
* Liquidity Detection: This one pisses a lot of people off, and may be regulated out. They sniff out the potential for large blocks coming behind small trades. Nothing new or wrong about that, except that there is evidence that the HFTs have access to superior data (and get it earlier) than is more broadly available. So, by pinging immediate fill or cancel orders (often in dark pool trading exchanges that most people don’t have access to), they can identify when a big seller, say a mutual fund, is making a move. Then they can immediately buy up all offered shares for that, and resell them at a higher price than would have been available if they weren’t there. Some say that specialists have done this for years, but the fact that it’s now done at speed of light seems to make an unfair practice borderline criminal (sorry for editorializing...).
* Flash Orders: Apparently, (according to Themis) HFTs have superior access to data streams provided by exchanges. Because of this, they can act accordingly, milliseconds before anyone else... which is all the time they need. This is a hotly contested area, though regulators do not seem to understand or have appetite to address it.
More...

Flash orders suck and should be removed. They actually have some utility, but it is massively outweighed by the perceived (and somewhat real) costs. Nothing else mentioned here is at all unfair. Anyone reading this can learn to code in C, figure out what networking gear / stack is necessary, learn the matching rules of the exchanges, etc.

The summary: HFTs do NOTHING that anyone else couldn't. They just go ahead and do it instead of crying.

"I used to be able to make a lot of money in my Datek account with free charts. Now I can't, and it's not fair."
 
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