i see the speed of these market maker softwares. faster than any finger trader.
"I Am A Market Maker"--The Quote
- Thread starter riskfreetrading
- Start date
Last year at the show in Chicago I demo'd a high-end option trading system - the one the MM firms use. I was interested in its capabilities, but all the company rep wanted to talk about was how fast it was. It can't be hooked up to the internet like most systems - you need to be directly on a backbone. Only a few buildings such as CBOT in Chicago are wired for it.
I also picked up a magazine there called "Automated Trader." It's dedicated to algo trading, nothing else. There was an interview with an American guy who lives in Singapore, and they asked him if he also does computer arb in Chicago and New York. He said no, because he can't make an electron go faster than 186,000 miles a second, so he can't compete with guys who are right there.
Think about it. It takes an electron 1/20 of a second to go from there to here. Apparently that's enough to keep him out of the game entirely. I guess that's how the game is played at that level these days.
Its pretty simple you're not going to be an off floor market maker no matter what software you have. The exchanges do protect their members and the rules of parity and priorty are in place too. You're objective should not be to be a liquidity provider, but to be a piquidity taker.
For the moment the ISE the CBOE and the PHLX do the vast majority of the business in equity options. Each has different rules as to who can stream in their markets and how. Same goes with their rules on how much liquidity you are responsible for and what the payment for order flow deals are like. None of the programs are "set and forget".
For the moment the ISE the CBOE and the PHLX do the vast majority of the business in equity options. Each has different rules as to who can stream in their markets and how. Same goes with their rules on how much liquidity you are responsible for and what the payment for order flow deals are like. None of the programs are "set and forget".
Quote from marketsurfer:
I am sorry, but readers should suspicious to anything that is written and affixed with something that contains the word "riskfreetrading" (particularly a potential vendor testing the waters).
you can also add "free trading software" to the above quote.
surf
I have to concur that anyone who uses the term "riskfree" must be suspect.
there are times,10- 12 a year where the market sets up for huge free money,those trades ,if they were the only ones we made,would make us very profitable,if we could just sit and watch the screen without trading the rest of the time,this last one from 1440 to 1270 was a gimme,that would be as close as one gets to riskfreetrading
:eek: