Is Prop Trading equities/commodities DEAD?

Quote from bone:

There are skads of HF prop shops and private equity funds out there that will pick up any ECN quoting and messaging dropped by the IBs - wishful but unrealistic thinking that HF strategies will fade away with legislation.
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Correct . . . they will simply migrate to stand alone entities.
Politicians, for the most part, are idiots and each time they time they legislate they prove that point.
 
prop trading?
is it a deal where a shop managed by a bunch of m--f--ckers doesnt give a shit whether a trader makes money or loses, only caring about the trade volume?


no wonder it is a matter of time when most of these pathetic firms will bankrupt.

and after that most of them will still dont know why it happened :D
 
Perhaps this could limit to their ability to internalize orders...... however I imagine they would simply sell order flow to hft firms.
 
Yep, any electronic marketplace is going to get arbitraged to the highest frequency allowed ( or able to be gamed ). That genie is already out of the bottle and it's not going back, ever. Just because GS fades away doesn't mean that Tower Capital or Rennaissance or Shaw or Citadel or one of 8,000 other entities won't immediately pick up the slack. The technology and strategies are available and there is spec cash available to be put to work (lots of cash taken out of both stocks and bonds - some has been put to work in softs, energy, and metals but otherwise lots of cash).
 
Quote from Don Bright:

The banking reg's that "passed" (agreed upon anyway) yesterday should work to limit the HFT going forward by not allowing banks to trade "prop" - or at least limiting it. This is a positive for we traders, possibly a negative for overall trading volume which will affect the exchanges and ECN's.

It will be interesting to see how this pans out.

Don
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Don, I respectfully disagree.

According to a study done by Tabb Group earlier this year, ibank prop desks only accounts for 17% of overall HFT by volume. The majority of HFT volume are doing by proprietary (yes, prop) firms and independent market makers (58% of overall) And last time I checked, there are no similar regulations banning firms like DRW and say Trent Cutler's group from engaging in HFT (yes I am deliberately avoid using Getco's name, for over usage).
 
Quote from Don Bright:

The banking reg's that "passed" (agreed upon anyway) yesterday should work to limit the HFT going forward by not allowing banks to trade "prop" - or at least limiting it. This is a positive for we traders, possibly a negative for overall trading volume which will affect the exchanges and ECN's.

It will be interesting to see how this pans out.

Don
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how can a negative for overall volume be good for traders, this is disastrous for liquidity
 
Quote from MohdSalleh:

how can a negative for overall volume be good for traders, this is disastrous for liquidity
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Real liquidity is only available when you're on the wrong side of the trade.
 
Since 2008 lol? Come on. That's nothing. You're still an infant in this world. As for HFTs, I think it's hilarious. First it was MMs and now it's HFT's. There will always be something to blame bad trading on. You guys need to start blaming yourselves and quit using HFTs/MM's as an excuse. :cool: kinda funny how MMs have faded out of the picture. Take 4-5 years of your life, and devote it to learning an edge. Also get outside help because it decreases the learning curve substantially.
 
Quote from Clubber Lang:

Real liquidity is only available when you're on the wrong side of the trade.
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There's a lot of wisdom in that statement. It takes a long time before most people figure that one out, if ever :)

The only solace for a decline in ibanks is that you might see volatility and trading opportunities return.

Most of the ibankers coming off sucking the Banking nipple blow out slowly when their order flow dries up and they have no access to it.

Also, its unknown how much the banking industry is providing in terms of wash trades, curious deals with insiders, offshore accounts, etc. This unwind will likely have long lasting and negative effects on the price of equities going forward.
 
Quote from athlonmank8:

Since 2008 lol? Come on. That's nothing. You're still an infant in this world. As for HFTs, I think it's hilarious. First it was MMs and now it's HFT's. There will always be something to blame bad trading on. You guys need to start blaming yourselves and quit using HFTs/MM's as an excuse. :cool: kinda funny how MMs have faded out of the picture. Take 4-5 years of your life, and devote it to learning an edge. Also get outside help because it decreases the learning curve substantially.
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Did you trade the day of the flash crash? You can't tell me because of all this subpennying, flash trading, intenationaliztion, ect. isn't responsible for the lack of liquidity out there. The reason the SEC is having these discussions is because that day those firms responsible for all the volume and 'liquidity' disappeared...I remember reading from Tradeworx that they admit they shut down during these times....just so you know i've been trading equities for 7 yrs and am a profitable trader.

Yes we all need to adapt I agree with you there, but why should anyone be allowed risk free strategies that aren't available to everyone?
 
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