Quote from kitty1996:
Do you work for a prop firm?
What stocks do you trade?
Many stocks are heavily "program trading" and these programs wipe out completely all of the loss-rules set by the firm in a milisecond. I think the big boys use these program trading to take all of prop firms' "lunch & dinner".
Quote from NY0BScalper:
I look for inefficiencies in an all-computerized market stemming from two programs not having an awareness of each other.
Example, there's program A - a buy program - which, when it comes in, will sit on the bid for 30 seconds, then cross the market through 10 cents, sit on the bid 10 cents higher then the price it came in on initially for 30 seconds, pull the order completely for 5, come back and sit on the bid 10 cents higher than where it originally came in, then step up another 10 cents and sit on the bid. I watch the stock and see the sign when program A comes in.
Program B tries to envelope the stock by posting large size 10 cents away from the inside market. Say, 8k shares.
Now, program B probably wouldn't be offering stock 10 cents away from the inside market if it knew that buy program A is in the stock, however, program B doesn't, and when buy program A does, I cross through the market, take all the stock I can from program B, wait 70 seconds, and dump it all to program A for a 10 cent profit on 8k shares, +all the other stock I could get, so something simple like that that could be a $900 trade. Of course, if program A won't let you dump an 8k+ position into it, then you can't take that trade with that size... the best bots are the blackhole ones where stock goes in and doesn't come out... those + stupid "3SD" enveloping programs = fun pay day.
It's not always as black and white as that, though sometimes it is.
But because the programs can't always see each other, competing can very very much be done.
Quote from NY0BScalper:
I look for inefficiencies in an all-computerized market stemming from two programs not having an awareness of each other.
Example, there's program A - a buy program - which, when it comes in, will sit on the bid for 30 seconds, then cross the market through 10 cents, sit on the bid 10 cents higher then the price it came in on initially for 30 seconds, pull the order completely for 5, come back and sit on the bid 10 cents higher than where it originally came in, then step up another 10 cents and sit on the bid. I watch the stock and see the sign when program A comes in.
Program B tries to envelope the stock by posting large size 10 cents away from the inside market. Say, 8k shares.
Now, program B probably wouldn't be offering stock 10 cents away from the inside market if it knew that buy program A is in the stock, however, program B doesn't, and when buy program A does, I cross through the market, take all the stock I can from program B, wait 70 seconds, and dump it all to program A for a 10 cent profit on 8k shares, +all the other stock I could get, so something simple like that that could be a $900 trade. Of course, if program A won't let you dump an 8k+ position into it, then you can't take that trade with that size... the best bots are the blackhole ones where stock goes in and doesn't come out... those + stupid "3SD" enveloping programs = fun pay day.
It's not always as black and white as that, though sometimes it is.
But because the programs can't always see each other, competing can very very much be done.
banks tend to get pissed and complaint with the exchange if you do that too often... or too well...Quote from Cutten:
Programs are predictable, so you can exploit that predictability. For example you can use bids/offers to fake the program into front-running you, then whack their bid/offer - hey presto, instant liquidity & price improvement.