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High-Speed Trading No Longer Hurtling Forward
- Thread starter OnClose
- Start date
Quote from 2rosy:
i know strategies that are profitable everyday but 1-3 million per day? there's only a few firms that could have done that and they had to pay for flow
I would tend to agree with this -- probably the only firms that can perform at this level of profit are ones that pay-for-order-flow to retail brokers and/or internalize against their own clients (e.g., sub-penny "price imrpovement", which in reality is anything but). Wholesaler PFOF deals and/or internalization are two of the major problems in market microstructure today, and it seems that the SEC agrees -- but it's such a big money maker for certain big firms that these anachronistic practices still have a lot of big defenders.
There are also real problems in the high frequency space that aren't necessarily big money makers (e.g., "quote stuffing", which, whether or not intentional, is a problem). I don't think these types of problems don't make a huge impact on the bottom line for most people, but they're downright annoying and also seem to find their way into the popular press. Many, if not all, of these could be fixed with relatively simple rule changes -- e.g., any order that wants to show up on an order book must commit to existing for at least 1 second (unless filled of course).
Fragmentation is another problem that I think is exploited by certain high frequency players, but I'd argue that the main culprit here is muppet institutions who (I'm guessing) are persuaded by scare tactics from dark-pool marketers. I'd say you must be a muppet if you think it's a good idea to send your order to someone's private ECN (where they can do whatever you want with your order, including trading against it). Hopefully they're starting to get wise to this after the Pipeline scandal.
Quote from CT10Gov:
Dude, he's being sarcastic...
This is the part where I really wonder about you....
(aren't you the one who believes central banks are behind HFT?)
Sarcastic is fine.
Just forget about me - no need to wonder.
And yes I think that Central Bank actions are related to the proliferation and need for HFT with their indirect involvement through leverage they provide to major dealer banks that are active in market making which is subset of HFT today.
Of course, the fact that HFT isn't a very leverage intensive subset of strategies will not change your mind (I know I know, we've gone through this before).
It's funny how "Sarcastic is fine." doesn't actually address anything: that you failed to notice his sarcasm and went on the attack; or the multiple of other things that sailed right over your head.
Interesting.... in the gallery of ET's oddities, you stand out, my friend.
It's funny how "Sarcastic is fine." doesn't actually address anything: that you failed to notice his sarcasm and went on the attack; or the multiple of other things that sailed right over your head.
Interesting.... in the gallery of ET's oddities, you stand out, my friend.
Quote from vicirek:
Sarcastic is fine.
Just forget about me - no need to wonder.
And yes I think that Central Bank actions are related to the proliferation and need for HFT with their indirect involvement through leverage they provide to major dealer banks that are active in market making which is subset of HFT today.
Quote from CT10Gov:
Of course, the fact that HFT isn't a very leverage intensive subset of strategies will not change your mind (I know I know, we've gone through this before).
It's funny how "Sarcastic is fine." doesn't actually address anything: that you failed to notice his sarcasm and went on the attack; or the multiple of other things that sailed right over your head.
Interesting.... in the gallery of ET's oddities, you stand out, my friend.
And you are one fat and ugly bond trader and you know that they are not the most intelligent bunch!
Nothing personal.
Leverage intensive is just detail how HFT is done on micro level. I meant leverage as excess liquidity and cushion to support market operations by Central Banks on macro level. Besides what is wrong with Central Bank support? Markets are safer that way on macro level and also on micro level if you are on the right side of the trade.
Quote from CT10Gov:
It's funny how "Sarcastic is fine." doesn't actually address anything: that you failed to notice his sarcasm and went on the attack; or the multiple of other things that sailed right over your head.
Interesting.... in the gallery of ET's oddities, you stand out, my friend.
Other than that I am 99.99% right.
Quote from antaram:
hard to pay attention to numbers such as in this article, if a HFT firm makes 100 mm in gross trading profits in a given year, but spends 75 mm on technology during the same year, what's the number you would use to show their profitability? how would the author know how much HFT firms used on their HFT related expenses?
How can you think they spend 75 million on technology? That's an absurd number.
I see. Again, you are drifting off to nonsequitors.
I feel like I'm talking to someone whose not entirely with it...
I feel like I'm talking to someone whose not entirely with it...
Quote from vicirek:
And you are one fat and ugly bond trader and you know that they are not the most intelligent bunch!
Nothing personal.
Leverage intensive is just detail how HFT is done on micro level. I meant leverage as excess liquidity and cushion to support market operations by Central Banks on macro level. Besides what is wrong with Central Bank support? Markets are safer that way on macro level and also on micro level if you are on the right side of the trade.