hey HFT scum, yeah, you. Watch this

[asiaprop]

glad you asked: HFT in itself is not harming the market (NOR does it add any value whatsoever). What comes along with HFT is what REALLY DOES HARM the rest of all market participants. Keywords, sub-pennying, flash orders, co-location (which takes everyone else out of the business but those who have the ability to invest millions just to get up and running), finally putting orders in the market to mislead other participants and which are not real orders but get pulled before they can be hit. This has nothing to do with a market that is fair, transparent, and affords equal opportunities to all market participants.

See, you actually prove all my points, you provided a good example about mailing services yet you applied it incorrectly. Email is a great invention and solved many problems and improved speed of delivery. You know what the great thing about emails is? Its that its freely available to ALL of us. Open a company which offers server rentals for co-location at $50/month and I will drop my argument.

Quote from walterjennings:

Mind explaining why HFT is 'thievery'? Because it can react faster than you? No laws against using new technology to make faster / more efficient transactions and services. Eg. Email vs Air Mail vs Horse Mail. Things change. Get used to it.

 

[asiaprop]

you still dont get it. Sure always some who abused the markets before because of monopoly or oligopoly powers wine when its taken away from them. BUT every single of those poor bastards had the opportunity to move upstairs to trade from the desk. Or do you want to deny that?

Quote from walterjennings:

Funny. Floor traders said the same thing about you ankle biting desk traders Computer assisted trading made the markets too fast for them to keep up and they whined to high heaven about the death of the pits.

 

[asiaprop]

1) anything that allows for faster routing than the fastest fiber optics cable that is available to retail guys living in NJ or Manhattan. You know you can continue playing this mind game but you know, it does not change the fact that what most consider fair is an access that someone who is engaged in this business professionally or personally can afford to invest to be part of the game. Fiber Optics is not too much to ask, paying hundreds of thousands for code development that can execute code in single digit milliseconds and server rentals and leased lines is too much to ask. This is a discussion which should start on a fundamental level rather than splitting hairs. Most of the times those who try to get into #peanut negotiation discussions" appear to be close to running out of arguments. You sound very much like it.

2) Rest assured a lot more than 1% of the HFT participants move orders around, so fast and so often that it has nothing to do with transparent markets anymore. If you go to a car dealership and the price of the car changes every 5 seconds depending on how the impression by the sales man of your psychological state changes by the second then you would be pissed off, wont you? If I see an order in the market, hit it, and find out a second later that it was pulled just 0.1 seconds before I hit then what does that tell me? Bad luck???

Joke yourself!

Quote from walterjennings:

#1) Define 'co location'. say you live in cali, your exchange is in nyc. where is too close for you? keep it out of the same building? keep it out of nyc? keep it out of ny state? you can not solve the problem that some people will have lower latency to the exchange than others. imagine if people overseas complained about YOUR latency because you trade on 50-100ms. they trade on 200-300ms

#2) Are you saying all HFT sit on bid and offer and cancel 5000 times a min? Hate to break it to you, most (99%+) dont. Exchanges crack down on people playing 'spread games' like that.

But from a ideological standpoint. Why not let them do it? If they place an order, they risk being filled. There is nothing 'illegal' about the idea that I could possible want to send an order to the exchange that only has a lifespan of 100ms. If you are complaining about not being able to see the true sizes under them. Filter the bid ask size to only include offers that stick around for a longer period of time.

 

[asiaprop]

Lol, then again I ask you, what purpose do HFT serve then if they can completely disappear when markets get hot? I mean sure if they had the same rights than all market participants then fair, they can turn off machines whenever they want. However, with all the perks that come along being in the HFT segment I ask you where they pay up for in exchange for all the perks they are getting (perks = look couple posts above)...

A good business deal is always something that benefits both sides, a suckers play is something where one side extracts all the profits in order for the other side to be on the losing side all the time. Guess who pays for all those pennies...

Quote from walterjennings:



If HTF runners want to pull their systems from the market in high volatility, its their choice. They are not market makers who agree to always have a bid/ask posted. And even the market makers will widen out their spreads to 50 cents+ if the volatility gets too high. I wish people who make their living off the market understood the fundamentals a little better.

 

[asiaprop]

then you dont even understand what HFT means. You are certainly none as you described yourself.

But this post takes the icing off the cake. I traded multiple instruments over the past 10 years, including cash equity. You are telling me that all the times when I had a funny feeling when my order was not filled although a matching offer showed up on the screen half a second ago, or when someone got filled 0.1 penny lower on my buy order right in front of my face has nothing to do with "jumping ahead"?

Quote from walterjennings:

As for your statement for 'jumping ahead' of natural buyers and sellers. Thats just tin foil hat paranoia. What you are describing there is insider trading (trading based on not public data), and if you think any exchange actively allows any of their clients to front run other clients. You need to start doing some research.

I for one, have done HFT on a PC built out of store bought components. I am not co-located at the exchange (though I do co-locate on a fiber backbone). And I do not have _any_ knowledge of people's orders who arrive after mine. (And do not jump the queue in any sort of way beyond offering a better price).

 

[asiaprop]

So, lets follow your argument.

Janus comes in to offload a larger position. So your holy HFT outlet jumps in. Now what? By definition they are not supposed to warehouse positions, so who they sell this out to offset the exposure? HFT has served zero purpose other than taking someones order (hopefully, and after shaving some topping off the cake) to spit it out seconds later back into the market. Ok, so the HFT guy has not taken on any risk exposure, has not provided liquidity (LOL, other than having put a low bid into the market to show a higher offer seconds later), what about the spread. Sure about the spread we can argue, in quiet times more market participants always means tighter spreads, but I have not seen spreads getting tighter during volatile times over the past couple years, at least not BECAUSE of HFT.

You unfortunately have no clue whatsoever how markets really function. Maybe you joined a HFT desk as C++ or C# coder but PLEASE try to not pee on yourself by telling the world how markets operate. Your example has done nothing to spreads nor liquidity, nor risk transfer. If you traded your own and managed risk over several years then you would know.

Quote from bevo96:

Stock.

You are a moron.


1) Colocation - What do you propose here? Everyone in the world is required to enter their orders from ONE LOCATION. Otherwise someone is going to be closer to the matching engine than someone else and FRONT RUN them with the using the speed of light to their advantage. My grandmother in Ohio keeps front running my grandmother in California every time they are both trying to scalp the same penny with 100 shares on their online brokerage account.

IDIOT.

2) Liquidity - Who do you think anyone is going to trade with if they ban HFT (Market Making with Computers). Is your piker ass going to be there to take down a million shares from Janus when they want to unload a position? Maybe you and my grandmother can take down a block of 500 shares. What will the spreads be like at this point with no HFT and a transaction tax? 25-50X current spreads.

I hope to god you morons and populist can push thru an HFT ban, Ill be the first one in line to run back down to the floor and make you a dollar wide manual market with a 2 minute time option. Much easier money than fighting for mills.

You have no clue what you are asking for, you obviously have ZERO understanding of market microstructure.


IDIOT.

 

[asiaprop]

EXACTLY. When volatility picks up the spreads are as wide as ever. No HFT bs has ever changed that. Anyone who traded 5+ years can support this claim.

Quote from MoreYummy:

Actually let HFT show us how illiquid the market will be without them, i dont see anything different 15 years ago and now on spread.

 

[asiaprop]

LOL, total bollocks. 200/month and a little coding work and you are up and running. Dont make me laugh hysterically. So, how come not everyone is in this lucrative business, after all most HFT dont seem to have a single losing month in their books. You are a complete moron.

Quote from tgtrader:

This whole belief that to participate in HFT you need to (1) have tens of thousands of dollars per month to get co-located, and (2) a supercomputer is so far off it actually IS funny.

(1) I know of a firm that offers co-location (or at least sits at a facility near the NYSE/NASDAQ with a direct data pipe to the exchange) for $200 per month.

(2) As mentioned by other (smarter) members, you don't need a supercomputer to do this. In fact, a $300 Playstation 3 (I'm not kidding) has MORE than enough power to HFT quite a few stocks.

So, $200/month for co-loation, $300 one-time cost for a PS3, and monthly data fees (which many already pay at their home anyway). All that is required to successfully run a HFT strategy is intelligence, hard work, and skill.

Whiners need not apply.

 

[asiaprop]

Sorry for the many replies in this thread. Am I emotional about this issue. Yes, I am. Why? Because I think business practices such as this are CLEARLY promoting unfairness, in transparency, and less price discovery in the markets. Something we have been hoping and fighting for years. Couple issues get me really heated up which is this, fx bucket shops, and people who claim ibanks are solely responsible for the mortgage mess and no fault lies with a government having made false promises and idiots thinking they can afford a 20x leveraged life style. (oh I almost forget, to those trying to single out GS as the only thieve,....I find your posts ;-)

Despite my heated discussion style I stand behind all my posts and opinions and believe I backed up most of them with facts and what I observed in the markets over many years.

 

[schizo]

Be that as it may, you would be better served had you took the time to write to government bureaucrats rather than writing a diatribe on this forum where nobody neither gives a shit nor has the means to do anything about it.