Regulators Clamping Down on High-Speed Stock Trades

[Bob111]

Quote from trade2live:

HFT traders have ruined the market. I read that it's now possible
to make round trip trades in fraction of seconds (e.g.1/10th).
We need some kind of level playing field , the other problem : HFT traders are sheeps, they all do pretty much the same thing. At least , since they are around, markets are no longer the same, have you noticed.

Regulators need to say enough is enough , and put a limit on how many orders can be placed and how many trades can be executed in a given time span by a trader. We could say we are alll going back to manual, that is trades have to be manually entered by the trader and this would not affect other systematic traders. But that'isn't possible, but something limiting inputs should be considered. The point is some rules have to be put in place, the loads placed on systems may also become a systematic risk at some point .

before they do all that they should stop sub penny orders

 

[GordonTheGekko]

The vast majority of nay sayers of HFT's are 100% bull shit, but they do scare off home gamers. Huge volatility? Hell no you jack ass (referring to the article)!

 

[GordonTheGekko]

Quote from Bob111:

interesting argument. i do day trade stocks every single day. tens, if not hundreds of them. it's ain't easy and it's not getting any easier with all subpenny,hft bs,but still..being profitable for number of years i'm not even looking into futures..you do realize that with futures you are going to compete with whole entire world..the best and brightest. while in stocks(specially slow,low volume)-with very few participants. it's might be a pain in the ass to deal with them,but that would be another story..
imo-it's much easier to predict what few are going to do during the day, than hundreds the best of the best..and HFT will be there,in futures too. they ain't going anywhere any time soon. and again-imo there is much more variables that can affect price of the futures than in one particular stock.

but..hey...it's just my opinion..
if you can make consistent money from trading futures-go for it

Great points from the two posts. As a remedy for the stock market battlefield, day trading ETF's and ETN's (careful on the credit of issuers and don't beat your insurance limit of $2.5m) do not have the even winners/losers because the price swings are based on faith in other values. Price movement is due to outside factors, not off of bid/ask tick mini-auctions in company stock.

 

[deThommo]

OK, maybe I'm misunderstanding the situation, but if HFT systems are beating everyone then why and how is that? Are HFT systems acting so quickly that they are arbitrating all the volatility out of the market (i.e is it making it a more efficient market that smaller players can't significantly take advantage of)? There is still volatility so no (if this has significantly changed for this reason it would be interesting to know). Is the profitibilty/risk that others derive from the market not from it's volatility?
Also, forgive my ignorance, but has their been proof (not just heresay) that HFT systems have manipulated the markets?

 

[trade2live]

The point is not that they are manipulating markets, they are increasing volatility and systemic risk, and they represent unfair competition against pension funds, individual investors and traditionnal traders ( real HFT are actually not traders they are programmers, for them it's all about beating others in terms of speed and for many as I understand gaming the system) .
Now in addition to that which is now starting to be recognized by regulators everywhere, my opinion is ït's not right to make money by gaming the system with technology, the financial markest are about expressing your views and you make money if you get the market direction right , it should not be about devising programs to take advantage of the system. SOES traders took advantage of the system, but 1) they were the underdogs 2) they had skills. HFT have no trading skills other than programming and stats.
.
Were you watching the markets during the flash crash, well I know because I had started to scale into a long position in GBP/JPY , which dropped more than 10 big figures on that day, somehow I got out with out losses by buying a lot at the bottom, it was Armageddon.
Every tick in the S&P drove the direction of currencies , I don't think it used to be like that. One day everything will collapse , and you can thank the HFT traders for that.