What's the difference between HFT front-running and Insider-trading?

GRULSTMRNN said:
I simply corrected you, hedge funds have a lot of order flow information and at times front run client orders (illegally). Some operate vast dark pools and manage extremely large orders. Some hedge funds lost law suits because of that.
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I'm sure they are, but this is not HFT front running. The OP said that HFTs essentially have non-public info they use which would be illegal, but they don't. The firms that do may use HFT technology to take advantage of private information, but it's not the same. The kind of front running HFTs do is no different from you and I looking at DOM/orderflow and clicking a mouse. One of us will get there first.
Just to be clear, HFTs do have advantages just like any large customer has preferential treatment, but I don't believe these are outright illegal. Questionable for sure.
 
That's your opinion only. If you honestly tell me that when SEC mandates that markets ought to be fair and equitable and clearly defines it and you walk along and claim its not illegal that large players having access to pricing data earlier than anyone else no matter how colocated you are or how close you are to the matching engine and think it's legal that some players have access to certain algorithmic order types others don't and it's legal that hedge funds who operate dark pools use the order flow in the pool to trade based on that then you clearly don't understand what fair and equitable means. Just because a regulator does not do its job does not change the facts provided above.

qlai said:
I'm sure they are, but this is not HFT front running. The OP said that HFTs essentially have non-public info they use which would be illegal, but they don't. The firms that do may use HFT technology to take advantage of private information, but it's not the same. The kind of front running HFTs do is no different from you and I looking at DOM/orderflow and clicking a mouse. One of us will get there first.
Just to be clear, HFTs do have advantages just like any large customer has preferential treatment, but I don't believe these are outright illegal. Questionable for sure.
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schizo said:
They say one is legal and the other illegal. But why do they seem the same in my eyes?
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Same can be asked about how everyone in US congress became a millionaire when reaching that position? They are legally insider-trading and completely abusing their position from every aspect.
A French revolution is in order.
 
Maverick2608 said:
If we play tennis and I tell you I am going to buy a shitload of shares of XYZ and you run home and buy XYC ahead of me, it is not

Sub-pennying until the market moves and hits your limit.
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You got that backward. HFTs found out that I was buying XYZ because MY ORDER WAS ALREADY IN THE ORDER QUEUE--which means I should be in front of the line ahead of their orders. SO HOW IS IT POSSIBLE THAT THEY GET THEIR ORDERS FILLED BEFORE ME?
 
qlai said:
Doesn't that just transfer power from one elite to new elite? Human nature.
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Ah, at least someone understood that lesson of history. Bravo.

"Let's kick the bastards out!" always means "...so our bastards can get in." But the idiots who "man the barricades" will never understand that. I grew up in a country where people spent their lives shocked that all the slogans about the brotherhood of man, equality, and all the rest somehow failed to pan out despite the seas of blood that were spilled in order (er, nominally in order) to achieve it.
 
The debate is somewhat silly and some of the arguments are just repeating hearsay. Eliminate the private feed which beats the SIP and HFT is gone.
 
ETJ said:
Eliminate the private feed which beats the SIP and HFT is gone.
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There will always be someone faster than others, just like there will always be someone who's smarter than others. And there are people who can be both.
 
"There will always be someone faster than others, just like there will always be someone who's smarter than others. And there are people who can be both."

Sure many will be retail-like RAES and SOES bandits - now it's a game and the playing field will become more level.
 
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