HFT/Algo end in sight?

Quote from jd7419:

Wish you were right, but imo not a chance. I think the end of all non hft traders is upon us. The most interesting time, the point of no return will be when only hft shops are left. What will they do when they kill off every last piece of prey from these markets?
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Just to be clear - The kind of HFT/Algo I'm referring to are the kind who use the strategies that are soon to be outlawed.Personally I think once this segment has been removed then the market will change for sure most likely for the better.

I have nothing against people who use automated systems,if they are happy to let the computer enter/exit trades on their behalf then fine,so long as they don't think its acceptable to input thousands of lots that are never executed to confuse/get a position on.

I believe that everyone can live together so long as strict but also common sense rules are in place and are adhered to.
 
Quote from Occam:

I think it's a horrible idea if this were a tax; that is, if such fees were collected by/for the government rather than used to offset other trading costs (i.e. paid back directly to the exchanges). If set by the government for revenue-generating purposes, it will undoubtedly be set too high for efficient liquidity provision and kill the market, sending it offshore.

On the other hand, some (small) charge per order might be a good idea, but only if it's not a tax and only if all market participants are treaded equally (i.e., no exemptions for big customers/banks/mm's).
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It'll be nice if instead of a tax (that goes to guv) the cancellation fees are added to rebates on orders that actually execute... :)

probably just a pipedream though... :(
 
Quote from ElectricSavant:

In a primitive way, I can agree with this. It seems that the only people that make money in trading are the people on the inside or in the infrastructure.

ES
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I can say with absolute certainty that this is not true -- even though I can see why, from the perspective from someone who never succeeded at trading (which your post seems to imply), that this might appear to be the case. But regardless of how you got there, yours would seem to be a funny position for someone who's moderating of a trading Web site. Or maybe you're here in an attemt to warn others of the dangers of trading? There's nobility in that, I suppose.

Quote from ElectricSavant:

Greed has destroyed capitalism.

ES
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Greed can destroy anything humans create or have power over. But empirically, greed is far more destructive when present in Communism than in capitalism. At least capitalism has some built-in controls (e.g., competition) that can counteract greed, even if imperfectly.
 
They only restrict front/spot month so will have no effect as just drag the spot using 2nd and 3rd, doesn't even look like they bother with swaps or options, besides since when has a cornered market been an issue for day traders at least those guys are actually taking on positions, and you can still do it off exchange til at least 2013, nothing to do with algos. It will kill off more genuine volume and increase volatility - daft idea.
 
My take was that it would stop or limit spoofing and filling the order book with orders that are never intended to be filled,I think these orders are generated by algos.

If there are position limits then we must assume that some sort of fine or penalty will be imposed should they be broken.

My bad I guess for preferring to see a more true market.I can take volatility in spades what I can't is some machine throwing in millions of lots to mess with people.
 
http://www.bloomberg.com/news/2011-...ringhouses-mf-global-accounts-compliance.html

"Harkin said he would send a letter to the Joint Select Committee on Deficit Reduction, the so-called supercommittee, recommending it consider the transaction tax in its final product. The lawmakers said one of the goals of the proposal was to drive out some high frequency trading from the market."

The HFT lot seem to be singled out more than anyone else eveytime,if everything they do is above board then you have to wonder why that is.
 
Quote from newtricks:


The HFT lot seem to be singled out more than anyone else eveytime,if everything they do is above board then you have to wonder why that is.
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I don't have to wonder at all -- it seems clear to me that politicans want someone to blame (other than the banks that make huge campaign contributions), and a lot of failed/failing traders/brokerages/market makers also want someone to blame.

The fact that certain politicians seek to excuse a transaction tax with HFT indicates that what they really want is tax revenue for higher government spending. A TT is, in practice, an extremely indirect way to target HFT, if you understand that most HFT activity is liquidity providing that will by and large take place even in the presence of a TT, albeit at higher cost to the end customer.

That said, I think there are good arguments to be made for rules that would curb certain HFT abuses:

http://www.nanex.net/Research/Proposal/NanexProposal.html
 
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