Submitted by Tyler Durden on 08/08/2012 10:51 -0400
Capital Markets
Dow Jones Industrial Average
HFT
High Frequency Trading
High Frequency Trading
Indiana
None
Quant Trading
Twitter
Back in 2009 when the world wasn't filled with HFT 'experts', we deconstructed the topic of High Frequency Trading on a daily basis, and predicted not only the flash crash, not only debacles such as the Knight trading fiasco, not only the death of capital markets as a fund raising vehicle for companies who wish to go public (i.e. the FaceBook IPO fiasco), but much more (all of which has yet to pass before the stock market, as it was once known, is no more). The reason why little if anything can and will be done to fix the persistent threat to capital markets that is HFT is two fold: i) none of the current regulators understand anything about modern market topology, and ii) HFT is so embedded in markets that unrooting it would result in a complete reboot of "fair" stock valuation: imagine what would happen to stock prices if Knight and its "buy everything" algos were no longer present. Mass hysteria as the realization that vacauum tubes are now TBTF.
That said it is always amusing to observe as more and more people get in on the scam that is the "equity market", now completely dominated by robots which do nothing but accelerate and perpetuate momentum moves - after all it is all they can do in lieu of being able to read financials, or
http://www.zerohedge.com/news/chicago-new-york-and-back-85-milliseconds?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
As we have been warning since the spring of 2009: have fun trading this market, human. You will lose all the time. 100% guaranteed.
HyperLazy
HyperLazy's picture
Let's see... my ping to NY is 120. So I can get scalped 14x before my orders hit...
TruthInSunshine
TruthInSunshine's picture
In more primal times, that would have been a criminal offense for each of the 14 times, and actual justice would have been meted out to the offenders.
Now, it's not only accepted practice to rob a penny or two (or three) on 14 billion transactions per day, but the chosen are actually assisted and aided by the special infrastructure that the best friends forever of the New York Branch of the Mother Whore Federal Reserve Bank have exclusive access to.
When history is written a few decades or so from now, there will be a special section about this titled: Markets? Really...
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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