Interesting article about trading parasites - aka HFTs

Hydroblunt · Jan 18, 2011

Quote from Covertibility:

There were a few sites over the past year comparing the average salary + bonus of a surgeon vs the average Goldman Sach employee and the results, average surgeon pulled in $500k while the GS employee bonus in 2007 alone was $600k. It makes ya wonder, if you have the talent, would you rather go into finance or the medical field.

Average numbers for Goldman, or any of its competitors, are completely skewed by the executives' bonuses. Try looking at median numbers, they are nowhere near as pretty.

Dustin · Jan 18, 2011

Quote from ForexForex:

Seems like a non-issue to me. If you intend to hold for longer than 1 day the HFTers don't affect you, unless your worried about pennies.

I can't imagine why anyone on a daytrading forum would worry about pennies.

Scataphagos · Jan 18, 2011

Quote from Dustin:

I can't imagine why anyone on a daytrading forum would worry about pennies.

Lots of folks think/believe/hope they can thrive by "risking one tick to make two"... so penny and sub-penny issues apparently are relevant to them.

That's waaayyy too manic for me, but each to his own.

Unquestionably · Jan 18, 2011

Quote from Covertibility:

Aside from the one who should buy a magnetic wristband to help with his trading (and understand that HFT is legal and has been around since '99), here's something interesting:

Battle for Tech Geeks: Street vs. Silicon Valley

There were a few sites over the past year comparing the average salary + bonus of a surgeon vs the average Goldman Sach employee and the results, average surgeon pulled in $500k while the GS employee bonus in 2007 alone was $600k. It makes ya wonder, if you have the talent, would you rather go into finance or the medical field.

Lol, you don't even have any idea the amount of (insane) hours a surgeon has to work just to make $500k. And after that, he doesn't even have time left to himself to spend that money!

optionsgirl · Jan 18, 2011

Quote from Joovenile Jatt:

What part of it being 100 illegal dont you understand? Do you want to tell the exchange that 98% of your orders have NO intention to trade. You call it being smart... everyone else calls it what it is, fraud.

I wondering where in the SEC's regulation specifies that this is illegal. It's also hard to prove that someone cancels an order to manipulate the market. Who hasn't ever canceled an order? I'm not saying I condone this, but I'm not bothered by matters of a penny because as a retail trader there is no way I can compete at a fraction of a second.

LeeD · Jan 18, 2011

Quote from Hydroblunt:

Average numbers for Goldman, or any of its competitors, are completely skewed by the executives' bonuses. Try looking at median numbers, they are nowhere near as pretty.

When you consider a career path you should also take into account that most banking careers are short. Few people stay in the front office beyond early 30s. In Goldman median time in employment is about 2 years.

orange_trad · Jan 18, 2011

Quote from Hydroblunt:

Average numbers for Goldman, or any of its competitors, are completely skewed by the executives' bonuses. Try looking at median numbers, they are nowhere near as pretty.

Not to mention barriers of entry...

The Nephilim · Jan 18, 2011

Quote from optionsgirl:

I wondering where in the SEC's regulation specifies that this is illegal. It's also hard to prove that someone cancels an order to manipulate the market. Who hasn't ever canceled an order? I'm not saying I condone this, but I'm not bothered by matters of a penny because as a retail trader there is no way I can compete at a fraction of a second.

Section 747 specifically deals with "spoofing" and it is 100% illegal, now whether you care about pennies or not is not the issue, you either trade by the rules or you don't. Just because you have an amazingly fast system does not mean you can now place thousands of fake bids and offers.

walterjennings · Jan 18, 2011

Quote from The Nephilim:

Section 747 specifically deals with "spoofing" and it is 100% illegal, now whether you care about pennies or not is not the issue, you either trade by the rules or you don't. Just because you have an amazingly fast system does not mean you can now place thousands of fake bids and offers.

There is no such thing as 'fake bids and offers', only bids and offers which have very short life spans, if someone places an order on the books, HFT or otherwise, they are opening themselves up to be filled against. Call a spade a spade, people don't like short lifespan orders, but there is nothing 'fake' about them.

NY0BScalper · Jan 18, 2011

The exchanges don't ban heavy cancelling... they each set a ratio of fills: cancels which, as long as the HFT firm stays under, is okay. Technically you're not supposed to prop the market up with a fake bid and then cancel it, but from my observations this is not what HFT primarily does.