HFT - If You Commit The Following Your Company Is Finished

Quote from StarDust9182:


Is this what HFT has done - remove prop traders and along with it some more true market liquidity?
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Prop/screen traders are no more "real" liquidity than HFT.
 
it does seem the % of hypocrites in this thread appears to be a bit on the high side. 20 years ago daytraders were taking the money from the little people, now hft is taking the money from the daytraders. what's the difference? hft is essentially a daytrader, but simply a hell of a lot faster. fake liquidity? true, but let's not be naive about what a daytrader was/is actually adding.

yes, of course from a regulatory point-of-view some of the stuff going on right now, not necessarily related to hft in itself, but the way the big boys have trading advantages the little guys can only dream of, is questionable to say the least, but there never has been a level playing field. most here are ticked off most of all by hft apparently having slaughtered their golden goose and are only playing the "fair market"-card to justify their own failure, not so much because they actually give a damn about the markets themselves. being a winner one day, and a loser the next: that's life, get over it.
 
Quote from Random.Capital:

Prop/screen traders are no more "real" liquidity than HFT.
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"unreal" liquidity to me would be orders that show up on slower software as a steady bid/ask size, yet are being continually updated and changed on a faster time scale.

Is that what you mean?
 
Quote from bjw:

it does seem the % of hypocrites in this thread appears to be a bit on the high side. 20 years ago daytraders were taking the money from the little people, now hft is taking the money from the daytraders. what's the difference? hft is essentially a daytrader, but simply a hell of a lot faster. fake liquidity? true, but let's not be naive about what a daytrader was/is actually adding.

yes, of course from a regulatory point-of-view some of the stuff going on right now, not necessarily related to hft in itself, but the way the big boys have trading advantages the little guys can only dream of, is questionable to say the least, but there never has been a level playing field. most here are ticked off most of all by hft apparently having slaughtered their golden goose and are only playing the "fair market"-card to justify their own failure, not so much because they actually give a damn about the markets themselves. being a winner one day, and a loser the next: that's life, get over it.
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Hopefully, my past posts on HFT have made these points clear:

I don't care about HFT in my own trading methodology. I don't use liquidity as an edge. I am not 'ticked' off in my trading - pun intended.

I agree that there is little difference and the market is evolving. I am naturally curious about what is happening in order to adapt with it.

I have defined liquidity as I see it in the post above. The general volume share drop is related to HFT I think. My basic argument is that big trading fish need the little fish because two HFTs can't both make money.

One doesn't need a level playing field. One needs the ability to enter the same orders as everyone else and get a fair price. If any trader can enter orders that some traders can't enter, then that is an unfair advantage.
 
Quote from StarDust9182:


One doesn't need a level playing field. One needs the ability to enter the same orders as everyone else and get a fair price. If any trader can enter orders that some traders can't enter, then that is an unfair advantage.
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The "unlevel playing field" (of some being able to enter orders that others cannot) is more a function of broker/dealer internalization and PFOF deals with wholesalers, than it is of HFT. Not to say that HFT couldn't use some fixing as well (e.g. by eliminating quote stuffing).

http://www.reuters.com/article/2010/12/17/us-markets-dumb-money-idUSTRE6BG2H320101217?pageNumber=1
 
Quote from StarDust9182:

I have said before HFT is causing changes and I like all other such changes, will be eaten by something worse yet eventually (at which point expect the HFT people to squawk about unfair practices), I have to support Clubber's comments completely.

Clearly a national fair price can't exist where legislators allow one group (Deep pocket, co location, politicians) to get fills that most market participants CAN'T get while the captured regulators stand idlely by "studying things". These permitted cheats are impacting the entire market and like fish in the sea, when the little guys are all gone, soon after the big guys will be all gone as well. That is what zero sum means isn't it?

Market makers have the spread and price setting advantage. Why do they need the advantage of front running as well? The precise mechanism that they use is kind of moot. Clearly no one is playing a fair game when some players don't lose more a single day in a quarter. In a statistical universe, what are the odds of that happening quarter after quarter without something clearly wrong in a fair price?

The old days when market making allowed for some to detect monkey business and punish market makers sometimes, have changed to if no co-location and the right connections, no money for you!

On top of that, many little quys get their houses taken away, big guys get their bonuses paid (in some cases by the legislators), none of them end up in legal trouble for practices that seem fraudulent. Little fish are leaving the market in droves and far fewer are coming in to feed on.

Of course all of this will lead to a better world. In the end times of massive societal changes, corruption continues at the same rate as always, but nothing happens until the big bang comes. This is just a sign of massive legalized corruption in my view.
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Great post. I totally agree.
 
Listen, nobody gives a shit about the "high frequency" in HFT. It's the quote-stuffing (market pollution), flash trading (front-running) and sub-pennying that is literal theft. This is pure crap and needs to end.
 
Quote from StarDust9182:

My basic argument is that big trading fish need the little fish because two HFTs can't both make money.
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The HFT pre screening order flows of pension and mutual funds is geared to robbing investors with front running.They don't need little fish , they need absent investors and accomplices in fund management to assist in thieving from investors , something the white collared parasites of economies have been doing for time immemorial.

Even before fast computers , pension investors were fleeced with investments at the day's high , as opposed to what fund manager paid which is a lot lower.

How naive can traders be?
 
Quote from oilfxpro:

The HFT pre screening order flows of pension and mutual funds is geared to robbing investors with front running.They don't need little fish , they need absent investors and accomplices in fund management to assist in thieving from investors , something the white collared parasites of economies have been doing for time immemorial.

Even before fast computers , pension investors were fleeced with investments at the day's high , as opposed to what fund manager paid which is a lot lower.

How naive can traders be?
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"white collared parasites"
you are being to inclusive. white shoe parasites is more like it.
 
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