HFT at the CME - rigged to those that can pay

[nitro]

"...There was not one word in Duffy’s written or verbal testimony to explain to this Senate panel that the CME has given extreme preferential treatment based on exorbitant pay-to-play rules it has imposed on its market participants.

To have given forthright testimony to the Senate, Duffy should have introduced the CME’s co-location pricing plan available at this link. It shows not a two-tiered market but an eight-tiered market based on the participant’s ability to pay CME $144,000 a year for super-fast speed declining to $6,000 a year at the bottom rung of the speed chain. Each higher rung of the pricey chain is feeding on the slower traders on the lower, cheaper rungs..."

http://wallstreetonparade.com/2014/05/internal-graph-at-cme-shows-how-the-futures-market-is-rigged/

 

[2rosy]

Link over a year old mcfly

 

[nitro]

Link over a year old mcfly

Has anything changed since then?

 

[IAS_LLC]

So what do you propose? As long as the data is being SENT at the same time, I don't see how it can be any more fair? If CME stops offering co-location, than people will buy up the real estate in the area the surrounds the exchange servers. The lowest latency increases, but the same latency arbitrage situation exists. Frankly, if a trader is getting burned because their competition has lower latency, it means they need to adjust their strategy to fit their latency profile. It has nothing to do with fairness

 

[syswizard]

So what do you propose? As long as the data is being SENT at the same time, I don't see how it can be any more fair? If CME stops offering co-location, than people will buy up the real estate in the area the surrounds the exchange servers. The lowest latency increases, but the same latency arbitrage situation exists. Frankly, if a trader is getting burned because their competition has lower latency, it means they need to adjust their strategy to fit their latency profile. It has nothing to do with fairness

Exactly....and the stench at the CME just continues to grow with Duffy at charge.
The CME could easily make changes to level the playing field, but they won't because it will reduce their net fee income.

 

[IAS_LLC]

Exactly....and the stench at the CME just continues to grow with Duffy at charge.
The CME could easily make changes to level the playing field, but they won't because it will reduce their net fee income.

What changes would you suggest?

 

[vicirek]

Exactly....and the stench at the CME just continues to grow with Duffy at charge.
The CME could easily make changes to level the playing field, but they won't because it will reduce their net fee income.

There is no Santa. Infrastructure, maintenance cost money. You want them to do this for free for all? Do you have capital to trade in microseconds? Just get real. By the way having latency edge is as old as markets themselves.

 

[nitro]

 

[IAS_LLC]

Yes, faster connections cost more money. So do faster cars

 

[syswizard]

What changes would you suggest?

Uh...charge for excess cancel orders...do it a way that is fair and compromising.

So simple, yet "so far away" (a take from the "Carpenters"... so close, yet so far away")
Duffy is such a F...ker. He won't do it.