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High Speed Trading Unfair To Retail Traders
- Thread starter vingbel
- Start date
I don't see the issue. This seems no different than J6P-retail complaining his quotes are 20 minutes delayed relative to EliteTrader-retail.
Quote from andvtrade:
this article is completely disturbing. nasdaq has on multiple times assured me that no one can see my hidden orders and that they are completely hidden. apparently this is not true because there is a loophole that someone can pay for information to see a flash of the orders. if this is true i beleive that anyone who trades should get together and strongly consider a class action suit against nasdaq. i have repeatedly been told by firm that i was being paranoid and no one can see your orders, which is not true because my firm can see them and so can nasdaq, and now it appears nasdaq lets others see my hidden orders for a fee. i am in the process of contacting a securities lawyer to see what is legal and illegal about that
Good luck with that lawsuit. Flashes are perfectly legal to show to Market Makers so that they can provide liquidity because it's the job of exchanges to provide liquidity.
You're not going to get very far because all kinds of exemptions exist for highly regulated Broker Dealers in exchange for bearing the cost and hassle of regulation and subsidizing you retail guys by paying into SIPC - even though a BD with no customer accounts can never generate a claim against SIPC.
You want more regulation, you got it - but at the cost of the playing field (in terms of trading exemptions) being tilted against you.
Quote from aceofbase:
don't be be niave.
it's hidden from display only
You seems to know something about this issue, so I thought I'd ask more specifically.
At least the article says: "a loophole in regulations allows marketplaces like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee."
Indicating that these are displayed orders (not hidden).
Q: do you think that someone can pay to get a peek at a my orders before they become displayed? That's what i find outrageous.
Thanks for the post.
I can proudly call myself an investor now. I usually hold a position for few hours to couple of days, but in the new ear, DT is defined as holding and changing a position in millisecond, I must be an investors. I ma taking taking tremendous risk for holding a position for 5 minutes.
I can proudly call myself an investor now. I usually hold a position for few hours to couple of days, but in the new ear, DT is defined as holding and changing a position in millisecond, I must be an investors. I ma taking taking tremendous risk for holding a position for 5 minutes.
This is a disgrace. Why is front running on such a massive scale allowed? Isn't this comparable to insider trading? These companies pay for inside information on what the entire market is doing!!! I find it incongruous that there exists a law against insider trading by an individual yet insider trading by companies using technology to trade on information on what the entire market is doing is allowed.
Quote from vikana:
You seems to know something about this issue, so I thought I'd ask more specifically.
At least the article says: "a loophole in regulations allows marketplaces like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee."
Indicating that these are displayed orders (not hidden).
Q: do you think that someone can pay to get a peek at a my orders before they become displayed? That's what i find outrageous.
Yes. Most orders are pinged to [edit] "dark liquidity providers" for potential price improvement and I think that is where the information for frontrunning is coming from. Some routes (such as BATS) allow you to turn off the dark book pinging.
The solution is pretty damn simple. If you think your route is compromising you STOP ROUTING THERE. We have a very competitive marketplace right now. Reward the good destinations by using them.
As for the effect this has on a retail trader - about ZERO IMO.
I find this whole thing pretty amusing - like this is a new development that there are traders/funds out there trying to find where the big orders are and step in front of them. ROFL That's been going on as long as there have been markets.
And like another poster said - adapt or die. In this game, whenever a door has closed, another one has probably just opened.
Quote from OldTrader:
After you've been trading a while you eventually learn the lesson that you have to play a game where you maximize your strenghts and minimize your weaknesses.
As a retail trader your strength is never going to be 1) speed of execution or 2) cost of execution. Therefore, if you're playing this game you're going to lose.
What retail traders need to learn is how to identify the conditions that lead to large, more substantial moves that don't require speed of execution to participate in, and don't require extremely low cost to profit from.
OldTrader
Excellent post!