HFT through the years

[earlyexit]

Quote from JamesVU2000:

They use speed and info against you and claim that's its beneficial. When in reality it's beneficial for them

It isn't a charity. When you make a trade, are you looking out for whoever is on the other side? Maybe taking a hit so that they get a better fill? Not everyone is going to be happy all the time. Someone always gets the short end of the stick.

Everyone and every firm is out to improve their bottom line. While I don't agree with illegal and manipulative tactics, you should be able to use whatever legal vehicle that makes more money.

 

[vicirek]

Quote from JamesVU2000:

They use speed and info against you and claim that's its beneficial. When in reality it's beneficial for them

Use this ET thread to learn more about HFT; just do not comment on it if you have nothing to contribute like the example above.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=266552

 

[JamesVU2000]

So I have nothing to contribute. Interesting. Enlighten me

 

[d08]

Quote from vicirek:

Use this ET thread to learn more about HFT; just do not comment on it if you have nothing to contribute like the example above.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=266552

That's not quite right. HFT industry has defended themselves with the "we make markets liquid" line, so it's fair to point that out. Of course you could say "everybody bullshits" but that would end all discussions very quickly. What about quote stuffing? It's clearly a very aggressive and unethical tactic that should be banned and even criminalized.
Go back a bit in time and add a "human face" to the exchange. In this world, quote stuffing would equal to someone yelling over the auction organizer in order to stop the prices from getting out in a timely manner, certainly this practice should be banned as the primary objective of the marketplace is to ensure a fair and orderly market (as cliche as it is these days). Ironically, I think the market should be more democratic and less capitalistic, buying favorable regulations eventually will destroy the market, driving everyone not in the inner-circle away.

 

[vicirek]

Quote from JamesVU2000:

So I have nothing to contribute. Interesting. Enlighten me

Them, They is all you know.

Follow link above, there is some info there, do not get upset it is not personal, just do not litter it with general meaningless statements is all I was asking for.

 

[vicirek]

Quote from d08:

That's not quite right. HFT industry has defended themselves with the "we make markets liquid" line, so it's fair to point that out. Of course you could say "everybody bullshits" but that would end all discussions very quickly. What about quote stuffing? It's clearly a very aggressive and unethical tactic that should be banned and even criminalized.
Go back a bit in time and add a "human face" to the exchange. In this world, quote stuffing would equal to someone yelling over the auction organizer in order to stop the prices from getting out in a timely manner, certainly this practice should be banned as the primary objective of the marketplace is to ensure a fair and orderly market (as cliche as it is these days). Ironically, I think the market should be more democratic and less capitalistic, buying favorable regulations eventually will destroy the market, driving everyone not in the inner-circle away.

There are regulations in place already to put people in jail for quote stuffing and other violations in the marketplace. It is not enforced.

Human face of the markets has ended in the crash of 1987 when it became apparent that Specialists and Market Makers are not capitalized enough to handle exploding issuance of paper: stocks, bonds and derivatives. More players were brought in and decentralization followed to create illusion of liquidity now called HFT and previously called MM.

What would bother you more; quote stuffing or $125 commission for stock trade? I take cents per share in commission and ability to trade electronically without talking to fat broker. As far as I am concerned HFT is irrelevant for me because I operate on a different wave length.

And if you ask for more regulations who do you thing they will regulate? You have guessed it - You, average investor not HFT guys.

 

[CalVolibrator]

fully concur, especially with your last sentence. But exchanges feel squeezed and bend over backwards to sell some extra bells and whistles to the highest paying bidders. That itself would be fine if it was offered to all, but look even at the fact that most exchanges only let privileged counter parties provide liquidity in listed options markets (such as the privilege of offering liquidity on both sides at the same time). This is not even on the hft side of things. Matters are far far worse in hft space. A fair and orderly market grants rights and responsibilities to all participating parties in an equitable and fair manner. We are FAR away from that ideal...

Quote from earlyexit:

It isn't a charity. When you make a trade, are you looking out for whoever is on the other side? Maybe taking a hit so that they get a better fill? Not everyone is going to be happy all the time. Someone always gets the short end of the stick.

Everyone and every firm is out to improve their bottom line. While I don't agree with illegal and manipulative tactics, you should be able to use whatever legal vehicle that makes more money.

 

[CalVolibrator]

Na, make markets as capitalistic as it gets, that can only be good. BUT, empower a regulator, provide them with a decent budget to actually REGULATE and set STRINGENT GUIDELINES by which ALL counter parties have to abide by. Same privileges and responsibilities for everyone. Very simple concept but it would cost those who actually pay their own self-imposed regulators.

Problem is much deeper: The world would instantaneously be a better place if all lobbyists would be BANNED in politics and if markets were fair and equitable. But it would cost those who are in power and thus nothing will change.

Quote from d08:

That's not quite right. HFT industry has defended themselves with the "we make markets liquid" line, so it's fair to point that out. Of course you could say "everybody bullshits" but that would end all discussions very quickly. What about quote stuffing? It's clearly a very aggressive and unethical tactic that should be banned and even criminalized.
Go back a bit in time and add a "human face" to the exchange. In this world, quote stuffing would equal to someone yelling over the auction organizer in order to stop the prices from getting out in a timely manner, certainly this practice should be banned as the primary objective of the marketplace is to ensure a fair and orderly market (as cliche as it is these days). Ironically, I think the market should be more democratic and less capitalistic, buying favorable regulations eventually will destroy the market, driving everyone not in the inner-circle away.

 

[CalVolibrator]

bollocks. You are a poster child for hft houses, so it seems. Your whole argument lies on an ASSUMPTION, not a FACT. You basically say lower commissions and tighter spread are a result of hft or even electronic markets. No, its not. It is because finally the crusty, closed to the public, sauna type mafia clique called Wall Street, has been forced to use decimalization, and was Wall Street houses and especially Exchanges were forced to open up and their home turf was subjected to outside competition. It has NOTHING WHATSOEVER to do with electronic or faster markets. None of the hft houses was EVER obligated to provide liquidity, yet they all demand the same benefits as liquidity providers and market makers. This is what is wrong with this picture!!!

Quote from vicirek:

There are regulations in place already to put people in jail for quote stuffing and other violations in the marketplace. It is not enforced.

Human face of the markets has ended in the crash of 1987 when it became apparent that Specialists and Market Makers are not capitalized enough to handle exploding issuance of paper: stocks, bonds and derivatives. More players were brought in and decentralization followed to create illusion of liquidity now called HFT and previously called MM.

What would bother you more; quote stuffing or $125 commission for stock trade? I take cents per share in commission and ability to trade electronically without talking to fat broker. As far as I am concerned HFT is irrelevant for me because I operate on a different wave length.

And if you ask for more regulations who do you thing they will regulate? You have guessed it - You, average investor not HFT guys.

 

[d08]

Quote from vicirek:

There are regulations in place already to put people in jail for quote stuffing and other violations in the marketplace. It is not enforced.

Human face of the markets has ended in the crash of 1987 when it became apparent that Specialists and Market Makers are not capitalized enough to handle exploding issuance of paper: stocks, bonds and derivatives. More players were brought in and decentralization followed to create illusion of liquidity now called HFT and previously called MM.

What would bother you more; quote stuffing or $125 commission for stock trade? I take cents per share in commission and ability to trade electronically without talking to fat broker. As far as I am concerned HFT is irrelevant for me because I operate on a different wave length.

And if you ask for more regulations who do you thing they will regulate? You have guessed it - You, average investor not HFT guys.

Sadly, I agree. The problems are gigantic and regulation is being done by all the wrong people. I don't see the connection between $125 commissions and HFT, 10 years ago the commissions were already the same as now but HFT share in the markets was comparatively small. HFT quotes are even worse than MMs as the quotes are an illusion. Everyone in the market pays the HFT guys though, in your case it just might be a smaller share as your time-frame is longer.