Will the HFT algorithms and AI based trading software be available to retail traders ?

Wrong, if you put in a limit order with the intent to get filled, canceled it and placed it in again, you never spoofed. Get your facts straight, pal. You copy pasted your bla I am referencing in another thread and it remains factually wrong. Spoofing is putting in orders that you never intend to see filled. Layering is doing the same but one sided at multiple levels. And your hybrid pro-rata/fifo orders are one of the most abusive algorithms in existence. Basically you can legally frontrun anyone who puts in regular limit orders. Large size wins. That is not what equitable markets aim at. Perhaps you should trade somewhere in Russia or the Ukraine if such low ethical and moral standard is your yardstick. Goodness.

raVar said:
I definitely think it should be allowed to be, and to try to regulate it, is to almost an attack on market mechanics. So ... in a way ... I guess I would say 'yes'.

I mean, how do we define "spoofing"?

Taken from wikipedia ...

"Spoofers feign interest in trading futures, stocks and other products in financial markets creating an illusion of the demand and supply of the traded asset. In an order driven market, spoofers post a relatively large number of limit orders on one side of the limit order book to make other market participants believe that there is pressure to sell (limit orders are posted on the offer side of the book) or to buy (limit orders are posted on the bid side of the book) the asset. Spoofing may cause prices to change because the market interprets the one-sided pressure in the limit order book as a shift in the balance of the number of investors who wish to purchase or sell the asset, which causes prices to increase (more buyers than sellers) or prices to decline (more sellers than buyers)"

If that isn't the biggest bunch of nonsensical bologna I've ever read, I don't know what is.

Ok ... let's just set aside the fact that Traders have been doing this since ... oh I don't know ... about the year 3,000 B.C.E., and I consider it the predatory nature of all market participants (as well they should ... how many of these auction shows that are popular on T.V. show participants doing something akin to this? How many times has Rick Harrison tried NOT to show interest, when he is interested in an item, and vice versa? I mean Good god ... )

How do we decide what is "feigned interest".

Well, according to this, it is posting relatively large number of limit orders on one side of the order book to make other participants believe there is pressure to sell.

Uhm ... I have a question ...

Just a small silly one ...

Again ... aside from the fact that Traders legitimately do this so as to NOT affect price in many cases, when they want it for X price ...

How do we determine intent?

Ever cancel a Limit Order you put in; and then re-enter the order elsewhere on the book?

Oops! You spoofed!

Ever have to trade in size, and knowing there is a Hybrid FIFO-pro-rata mechanism in place, to fill orders, and you need 3,000 ... so you put in the order for 5,000, knowing that you'll be filled for less, and wala, you get 2,725 filled, and you cancel the rest of the order?

Oops! Did you spoof?

It's a nonsensical rule, that is open to interpretation, and dare I say? Is used to scapegoat traders when politicians want to feel like they are "being aggressive" against "those nasty traders"
More...
 
Last edited:
Anyone who puts good faith limit orders into the matching engine gets hurt. Simple as that. Imagine you provide liquidity and are pretty high up in the queue. Some hybrid pro-rata/fifo algo joins the queue and a portion of that order gets matched at your price level before you get filled. Sweet isn't it? That's where US exchanges are at. It's a fucking pay for play game that has nothing to do with equitable and fair markets anymore. A system designed by greedy exchanges and in cahoots with unethical players to frontrun smaller orders. We need to go back to the basics. One single centralized exchange for each product with market and limit fifo orders. Everything else is a joke and completely destroys trust and faith in fair executions.

qlai said:
So the question I was asking myself is which market participants, that matter, are hurt by this activity? Obviously, it's not little retailers regulators are trying to protect. Since these games mostly played by automated algos, whose algos are getting negatively impacted? Well, we know regulators don't care if dinn13's algos are on the loosing end of this activity. My guess is that liquidity providers, most likely closely tied to the exchanges, not happy and complaining about it. Not much different from the whole asymmetric speed bumps ridiculousness. Maybe @dinn13 can shed some light on this.
More...
 
Last edited:
Ha, perhaps that was and still is your despicable fratboy approach. What one usually learns as a beginner in a competitive discipline? That there are opponents but that all players in the game hold themselves to fair standards to win the game. That the better may win, not the least moral or least ethical. And players who can't abide by fair rules either get punished and thrown out or they need to bribe the judges (exchanges here and even regulators to some degree, to look the other way)

raVar said:
I would like to hear from him on it, as he would be closer to that space than I.

Because everything I've seen (I guess Mark H. Gorton just got slammed with it) ... at least from where I'm standing? This "Spoofing" nonsense is ridiculous on the face of it.

I mean ... we're traders. We're supposed to be responsible for our processes, discipline, and understanding of to approach our business which is always changing.

And what you learn on day one? Is your counter-party is always trying to screw you. That's the point, and how we move markets.

:D :)
More...
 
GRULSTMRNN said:
you provide liquidity and are pretty high up in the queue
More...

In the cash stocks the market will usually have to trade through your limit order right? Isn't this because there is so much sub-penny orders/dark pools/multi exchange routing etc? I'm thinking liquid issues here...

GRULSTMRNN said:
Everything else is a joke and completely destroys trust and faith in fair executions.
More...

Isn't their counter to this that they are providing liquidity to the other side and that this sub-penny orders have a net positive effect for market participants?
 
Last edited:
GRULSTMRNN said:
Some hybrid pro-rata/fifo algo joins the queue and a portion of that order gets matched at your price level before you get filled. Sweet isn't it? That's where US exchanges are at.
More...
I have never heard of such orders on US Equities lit exchanges. I see that CME has it for Futures, but not sure if they apply to all instruments.

So you think regulators are enforcing anti-spoofing, and the likes, for the benefits of a fair market? I doubt it very much.

In your opinion, which participants are hurt by spoofing?

I'm not arguing for or against, just want to understand who is being negatively affected by this practice which has a momentary effect on price.
 
I am not sure of US equity exchanges. I don't trade US equities. Who gets hurt? Anyone who sends regular limit orders. That someone frontruns you does not have any effect on price at all. It has an effect on you getting potentially not filled at all at your specified price level.

Here is my gripe with those locusts: generating alpha purely from own skills, being informed, and having an astute sense of probabilistic outcomes is an incredibly rare skill set. It's probably as close as someone gets to the holy grail. This is eroded further and further by players in this market who could not make a dime but still generated millions and sometimes billions in profits through dishonest means. Look at SC Cohen. A formerly filthy trading outlet that made billions though insider trading and all sorts of dishonest and often illegal schemes. Look at him now, he can hardly make a dime under the close watch of the SEC. Same with the guys who speak so eloquently here. Most of the information they exchanged is usually only known to CFOs of hedge funds, guys who shuffle paperwork, obtain and maintain licenses, negotiate data subscription fees and the like. They generally can't trade even a 100 dollar account. Making money being completely ethical and taking the fiduciary duty to investors seriously is incredibly difficult and rare. And dishonest players make this business ever more difficult. Like a football player who constantly breaks and bends the rules and somehow always gets away with it because he knows the referee. Frustrating to say the least. I let the experts continue with their sweet talk.

qlai said:
I have never heard of such orders on US Equities lit exchanges. I see that CME has it for Futures, but not sure if they apply to all instruments.

So you think regulators are enforcing anti-spoofing, and the likes, for the benefits of a fair market? I doubt it very much.

In your opinion, which participants are hurt by spoofing?

I'm not arguing for or against, just want to understand who is being negatively affected by this practice which has a momentary effect on price.
More...
 
Last edited:
I agree with you on above. However, I want to point out that as far as games being played in the books, and all the special order types, all this is because large participants need to hide their activity as to not move the market. I think that's what @raVar means - spoofing as a part of execution strategy, not as preditory alpha generation.
 
I have often wondered when the dom is really bouncing around in the MNQ then it just sits on a price...are the HFT's spoofing in the background with each other causing this momentary stall?

ES
 
You must log in or register to reply here.
Back
Top