Market Makers are colluding to price fix for short/medium term

Im aware of the scale of HFT trading and I've seen all the videos...I browse the nanex site all the time where they expose their shenanigans...but mostly it's not as serious as you present it. I'd be much more worried about HFT front-running due to their speed advantages, quote-stuffing, dark pools which hinder transparency, and liquidity being pulled when needed the most..

Widespread collusion on the contrary does not seem documented anywhere. I think, there are simply too many people in the markets for any one entity to corner them anymore but a few seconds at most. If anything, big banks etc. definitely collude long-term, because they combined have pockets deep enough to affect global markets. Like the LIBOR scandal, ISDAfix, gold fixing, aluminum fixing, many examples of this...And yes, game-theory proves that true self-interest indeed means cooperation and collusion, not competition. Just another blow to outdated free-mkt neoclassical economics if anything.

I've seen at least widespread subpennying on the options. When I put in an order in the middle of the spread it is instantly insulated by many orders. Wait a second, do it again... same thing. The only way I get in is by accepting temporary loss and I get out when it goes even higher after. In that regard they blatantly cheat like a mofo. Come to think of it if my broker has hft why is that happening?

It isn't widespread as hft costs more than 30k a month... as I said. There are not any billionaires making the marke in slowmode. Some dude in his undies putting in a limit to buy for 5000 worth of stock isn't going to prevent them from price fixing. They make the market and perform breakup large orders for people.
 
This. I love reading about how I collude with all my competitors and take massive positions during a very volatile earnings period. It's become such second nature to me that I totally forgot that I do it.

Are you a billion dollar hft firm? No... so I'm not talking to you.
 
Funny, every time someone says something bad about brokers, option sellers or market makers he is immediately laughed at, usually by the same ET members, who categorically deny everything he is saying, like if their life ($$$) depended on it... :D
 
I've seen at least widespread subpennying on the options. When I put in an order in the middle of the spread it is instantly insulated by many orders. Wait a second, do it again... same thing. The only way I get in is by accepting temporary loss and I get out when it goes even higher after. In that regard they blatantly cheat like a mofo. Come to think of it if my broker has hft why is that happening?

If someone steps ahead of your order in increments that you dont have access to yourself, obviously thats a problem. Its one of the things I would be against. Also SMART routing imo is dubious. I've put in orders via SMART (me being best ask/bid) and have orders execute past my price on the tape (observed on 3rd party software). Very shady.

But that's a different case alltogether than collusion.
 
The collusion part is a different issue. The macro situation with facebook is pretty suspect all on it's own, with the price dropping to before earnings level... earnings where they doubled estimates. Not surprisingly, the price it almost shot to was between two enormous option open interests, and above that price was many, many outstanding calls.

While watching it for a while, I saw a few of the "dead giveaways" as I like to call them. The price shoots up 5 or 10 cents on an enormous amount of volume (~1 million) and then my program goes to the next minute before the price drops the same distance on... 80k volume. If you are just looking at the order book that might sound reasonable (that's 800 lots against limits of 1 - 10 on the book) but that would mean you know nothing about hft. Looking at a level 2 order book is useless today.

It also happened several times this morning (if you are looking at 1min intervals) that the price shot up a whole dollar and instantly flashed back down.

Derivatives are where the money is at these days, and Wall Street has figured out how to steal all that money by colluding... once again.
 
Looking at a level 2 order book is useless today.

That's why Level 3 trading platform is restricted to registered market makers... :cool:


Derivatives are where the money is at these days, and Wall Street has figured out how to steal all that money by colluding... once again.

Steal a bottle of Gin at the liquor store and they will arrest you, but steal millions electronically from unsuspecting market participants - on a daily basis - and nothing will happen to you.
 
Speaking of HFT, there is a new book called "Trading the measured move : a path to trading success in a world of algos and high-frequency trading", by David M. Halsey.

A short summary : "Trading the Measured Move offers a blueprint for profiting from the price waves created by computer-driven algorithmic and high-frequency trading strategies..."

I just ordered that book from Amazon, will tell you more about it when I read it.
 
OP

If trading FB is kicking your ass - move on to something else

Most of each session.., its PA is straight forward



Disclaimer;

I know jack about options

RN
 
Speaking of HFT, there is a new book called "Trading the measured move : a path to trading success in a world of algos and high-frequency trading", by David M. Halsey.

A short summary : "Trading the Measured Move offers a blueprint for profiting from the price waves created by computer-driven algorithmic and high-frequency trading strategies..."

I just ordered that book from Amazon, will tell you more about it when I read it.

Cool. Pls do keep us updated on your review of the book. It gets old hearing all the same complaints of markets not working etc.

Be great to hear solutions. We adapt or die. No excuses.
 
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