High frequency traders literally printing money!!! LITERALLY PRINTING MONEY!!!!

[trade2live]

I think regulators may have a case against HFT.
Everyone has noticed how nowadays you can't place an order without having a better offer take precedence over yours seconds later . It doesn't take a genius to figure this might lead to exacerbated declines or rises , just what we have been witnessing for the past 4-5 years. It's likely that the algos of these firms are all similar and chasing the same patterns, thereby leading to the astonishing herd behavior we see in markets today.

Beyond that if some firms get access to quotes before they are published even if that's "microseconds" before they are published, this is unfair as everyone should have the same opportunity to react to prices quoted.
If they dig a little I am sure they will find questionable things going on, but I understand it's firms like GS with it's top secret , US national interest super computer, that profit the most from HFT , they were among the ones pushing for the end of the uptick rule . So I doubt much will be done and instead we will be served another portion of B.S. by Wall Street . Like the current project on circuit breakers, reassure the public but keep the scam going .

The only good thing about this is that it might thwart any effort to impose a transaction tax, such tax would shut down instantly those firms and since they account for so much volume , guess what will happen to markets.

 

[Occam]

Quote from Big Outside Bar:
Anyone, yes even you, can rent a server these days in a data center within 500m of any major exchange for no more than a few hundred dollars a month. It's not colo but it's close enough. The power available at your fingertips is truly staggering. Any decent server has the processing power required to do realtime analysis of 1000s of market data messages per second. There's nothing stopping anyone turning around orders in under 50ms.

Very well put, Big Outside Bar. This is not a closed venue like the old floors; it's open to anyone who can compete and place orders. And that competition has narrowed spreads dramatically.

As for the (wannabe?) traders on these forums who can't or don't want to compete in an increasingly efficient market, I'm baffled as to why they don't just give it up and move on to try something different. I think it would rank amongst the best decisions of their lives.

 

[failed_trad3r]

You guys seriously don´t get it.

HFT gets all the benefits of being a market maker, but not the disadvantages. This is illustrated by the fact they turned their machines off when the going got tough.

Market makers arent supposed to do that.

This is the same as socialism for the rich and bankster elites with the bailouts.

All the benefits but not the risks.

 

[Big Outside Bar]

Quote from achilles28:

High frequency traders jump the order queue using ISO orders only available to market-makers.

They literally front-run orders that were placed *before* theirs, at the same price, due to a regulatory loophole.

That's why these investment banks/bd's kill it, everyday, with no losers.

This isn't "trading". It's front-running. No different than an institutional broker in the pits that signals large size to an accomplice *before* he puts the trade on. Except now front-running is computerized. Which is why the old floor guys can't make a buck.!

That's just one example I'm aware of. Perhaps others could post more.

I got that from a comment submitted by Tradeworx to the SEC on High Frequency Trading. pg 17.
http://sec.gov/comments/s7-02-10/s70210-129.pdf

Interesting how you decided to edit your post as soon as I posted that Tradeworx doc. What was the point of that?

The ISO issue is something that Tradeworx and others like them have been banging on about for a while now. As I think it says in the doc, a lot of us end up jumping the queue because of the ridiculous rule surrounding locked markets in Reg NMS. I don't consider that front running as it's not intentional. It's simply a consequence of using the order type. We're not idiots, we're not going to disadvantage ourselves by switching from ISO orders to MKT orders just to keep some pikers happy. If you want to get pissed then get pissed at the SEC.

 

[Big Outside Bar]

Quote from failed_trad3r:

Market makers arent supposed to do that.

Please show me where it states MMs (in any market) must quote 100% of the time. MMs can shut up shop just the same as anyone else if things get really rough. They aren't going to slit their own throats just so you can puke your position.

 

[achilles28]

Quote from Big Outside Bar:

Interesting how you decided to edit your post as soon as I posted that Tradeworx doc. What was the point of that?

The ISO issue is something that Tradeworx and others like them have been banging on about for a while now. As I think it says in the doc, a lot of us end up jumping the queue because of the ridiculous rule surrounding locked markets in Reg NMS. I don't consider that front running as it's not intentional. It's simply a consequence of using the order type. We're not idiots, we're not going to disadvantage ourselves by switching from ISO orders to MKT orders just to keep some pikers happy. If you want to get pissed then get pissed at the SEC.

You skip price-time priority of orders. That's front-running.

You say it doesn't count because it's "not intentional". Then concede you won't switch to market orders!

So clearly you're decision to use ISO orders is intentional and you're lying. Which doesn't surprise me considering the quality of character that would exploit flash orders and jump the queue.

Anyway, you're full of shit. You and your ilk unfairly rig markets to steal billions from the average investor and speculator. The markets are all about eating the other guys lunch. But doing it on level playing field, with integrity. A gentlemens wager. You're a high-tech pick-pocket with low morals. You steal for a living.

As for my post, since you didn't clue in, my entire rant was based on the front-running admission from the Traderworx document. No conspiracy there, Spooky.

This type of high-tech cheating will go the way of flash orders, and soon enough, you'll be back to webhosting 19 year-olds getting dp'd. Another great contribution to society

 

[Big Outside Bar]

Quote from achilles28:

You skip price-time priority of orders. That's front-running.

You say it doesn't count because it's "not intentional". Then concede you won't switch to market orders!

So clearly you're decision to use ISO orders is intentional and you're lying.

What the fuck is it with this site? Read what I actually wrote. Using ISO orders does not always result in violating time priority. It is sometimes a side effect. We're not going to stop using ISO orders because we want the behaviour they provide. If the SEC sort out the fiasco that Reg NMS has turned into and do away with locked markets then it won't make any difference to us. We don't rely on the time priority side effects in our strategy.

Quote from achilles28:

The markets are all about eating the other guys lunch. But doing it on level playing field, with integrity.

What fucking planet are you on? Seriously? Integrity!? Do you even have the slightest idea of the game you are playing and the people you are playing against? Either get real or get out the market. You're going to get spun around and butt fucked 10 times before breakfast with that naive attitude.

Quote from achilles28:

This type of high-tech cheating will go the way of flash orders

Flash orders were just plain cheating. Everyone knew it. We never bothered with them because the costs were high and it was obvious they were going to be banned. I'm personally amazed it took so long for something to be done.

 

[achilles28]

Quote from Big Outside Bar:

What the fuck is it with this site? Read what I actually wrote. Using ISO orders does not always result in violating time priority. It is sometimes a side effect. We're not going to stop using ISO orders because we want the behaviour they provide. If the SEC sort out the fiasco that Reg NMS has turned into and do away with locked markets then it won't make any difference to us. We don't rely on the time priority side effects in our strategy.



What fucking planet are you on? Seriously? Integrity!? Do you even have the slightest idea of the game you are playing and the people you are playing against? Either get real or get out the market. You're going to get spun around and butt fucked 10 times before breakfast with that naive attitude.



Flash orders were just plain cheating. Everyone knew it. We never bothered with them because the costs were high and it was obvious they were going to be banned. I'm personally amazed it took so long for something to be done.

Yes, integrity. Apparently, that's an alien concept to you. Thanks for showing your true colors, jackass.

As for the rest of it, you just admitted most HFT'ers unfairly jump the queue. Then, you downplay it as if it's irrelevant to profits LOL!!

And to be clear, I've got no problem with HFT'ers. I've got a problem with front-runners. That's what most HFT is. And I could out-trade you any day of the week with your penny-tick front-running with no algo's, no order book, and no queue jumping. Just a simple chart with honest market orders. Why? Because you don't know how to trade.

 

[zdreg]

Quote from schizo:

WAIT, WAIT, WAIT, WAIT!!!

The real question is why have these HFTs simply walked away on May 6th? If this has never happened before, what do they know that we don't?

This really sounds like some fucking conspiracy out of Hollywood.

he graduated from MIT. where did u graduate from? did u study darwin in school? where are u on the feeding chain? once you figure it out u won't be using four letter words.

 

[MarketMasher]

Are HFT's front-running? It sounds like it from the descriptions of seeing the orders first - whether in milliseconds or minutes really doesn't matter anymore.
I have to figure its profitable, or why bother? If it is profitable AND cheating, it wouldn't surprise me that it is defended since that would be human nature.
But if HFT's really do provide liquidity like some of them have said, I don't think they would object from being legally bound to provide it at all market times like NYSE specialists were obligated to. From what they claim, they shouldn't object to doing that, right?