I've been telling you, but there's something wrong with your brain. We use forms of market making and arbitrage (which have existed long before computers). Every buy and sell has an effect on the market place, and ours are no different. That doesn't make them manipulative. I make no pretense, and I don't give a shit whether you approve. I reply mostly for the other readership on slashdot who may actually be interested in learning something.
Why do you keep making accusations with absolutely no evidence to back them up?
Would you prefer a system where you can only buy from and sell to the original issuing company? And then only make money if they pay dividends, or if they choose to buy back and at a higher price? I personally prefer to be able to sell my share to whomever I choose. It doesn't hurt the company if I sell to a third party. Plus a company might get more initial investment if the investors know they can sell if they need to mitigate risk.
What we do is legal, and either beneficial or at least neutral to the market place. We don't manipulate prices or overload the exchanges. Indeed we have good relationships with the exchanges. They, unlike most here, actually understand what we do. The SEC and SROs actually monitor for bad behaviors, and I'm aware of huge fines. If anything is manipulative the exchanges will expel the firm - which is death for a trading company. We also monitor ourselves and our traders... we have a large compliance department, and strict policies. You have no idea how any of this works, but you still have strong opinions about it. You could fix your ignorance.
Front running is impossible for us, since we don't have customers. Inside information is unavailable for The same reason. We only trade off of public information. News and market data. The only advantage that we have is that we're smart. Anyone can get the speed. Trading off of leaked news ahead of time is illegal. I hope those fuckers are thrown in jail.
I forgot to answer the question about speed. Speed merely comes from competition between HFT firms. You go faster or you lose money. The competition is what drives the spreads narrower and therefore the cost of trading down.
If you don't want to pay the apple seller you don't have to. In exactly the same way, you don't have to pay the market maker - just join the bid or ask. You may not get filled immediately, and you may have to adjust your price a few times, but eventually you'll get filled. The market maker doesn't do anything malicious, thy simply provide the best prices. If they didn't they wouldn't get trades... only the best prices on the book trade.
You have no idea what you're talking about. 1 because of HFT market makers your buys and sells are always within 1c of current value (for liquid stocks) 2 because of HFT arbitraguers price differences at different venues are negligible 3 when you trade you don't need to pay the market maker anything. No one forces you to trade with a market maker.
If I were buying and selling apples for a profit, would you call that skimming? Or be outraged by it? What if I used computers to buy and sell apples far quicker and for less "per" profit on each (naturally to the benefit of my customers and suppliers)? What then?
1 you don't have to pay the market maker. Join the ask or bid. 2. Arbitrage ensures that you get the best price regardless of where you trade. Without arbitrage you might get an advantage by choosing a different venue. 3 because of market makers, if you choose to take their price you're guaranteed to get a price within 1c of "current value".
What the fuck are you talking about? The HFT company wouldn't be able to buy and sell a stock if the issuing company hadn't issued it. That company still has the funds they raised from the IPO regardless of whether some trader buys or sells it. And how are HFT companies stealing from the investor? The investor isn't forced into buying from an HFT company. And if they do choose to, how would that be stealing? If I buy and sell apples, I expect to make a profit from it. I doubt many would call that stealing.
Your argument breaks down right here: you DON'T have to buy or sell from the market maker. He has no way of forcing you. The only thing he can do is provide the best prices.
HFT doesn't frontrun. They'd have to get between the customer and the exchange. HFT firms simply trade on the exchanges with public information. You have to have customers to frontrun, and it's highly illegal.
Mitm might seem like it's similar to an uneducated idiot, but market making is really very different.
You have no obligation to buy from or sell to a market maker. None at all. You can trade all day on an exchange without ever trading with a market maker. You don't even have to pay the spread. Just join the bid or the ask.
People go to market makers because they have the best prices. Best prices equals top of book. Only top of book trades. Not best price, no trade. Hence market making only makes money if they have orders at top of book. Qed
Slashdot Mirror
BTW Buying low and selling high sounds like an amazing strategy. You are a genius.
I've been telling you, but there's something wrong with your brain.
We use forms of market making and arbitrage (which have existed long before computers).
Every buy and sell has an effect on the market place, and ours are no different. That doesn't make them manipulative.
I make no pretense, and I don't give a shit whether you approve. I reply mostly for the other readership on slashdot who may actually be interested in learning something.
Why do you keep making accusations with absolutely no evidence to back them up?
Would you prefer a system where you can only buy from and sell to the original issuing company? And then only make money if they pay dividends, or if they choose to buy back and at a higher price?
I personally prefer to be able to sell my share to whomever I choose. It doesn't hurt the company if I sell to a third party. Plus a company might get more initial investment if the investors know they can sell if they need to mitigate risk.
What we do is legal, and either beneficial or at least neutral to the market place.
We don't manipulate prices or overload the exchanges. Indeed we have good relationships with the exchanges.
They, unlike most here, actually understand what we do.
The SEC and SROs actually monitor for bad behaviors, and I'm aware of huge fines. If anything is manipulative the exchanges will expel the firm - which is death for a trading company.
We also monitor ourselves and our traders... we have a large compliance department, and strict policies.
You have no idea how any of this works, but you still have strong opinions about it. You could fix your ignorance.
Front running is impossible for us, since we don't have customers.
Inside information is unavailable for The same reason. We only trade off of public information. News and market data.
The only advantage that we have is that we're smart. Anyone can get the speed.
Trading off of leaked news ahead of time is illegal. I hope those fuckers are thrown in jail.
I forgot to answer the question about speed.
Speed merely comes from competition between HFT firms. You go faster or you lose money. The competition is what drives the spreads narrower and therefore the cost of trading down.
So that's a no.
If you don't want to pay the apple seller you don't have to. In exactly the same way, you don't have to pay the market maker - just join the bid or ask. You may not get filled immediately, and you may have to adjust your price a few times, but eventually you'll get filled.
The market maker doesn't do anything malicious, thy simply provide the best prices. If they didn't they wouldn't get trades... only the best prices on the book trade.
Perhaps, you should read one.
I've worked in HFT for about 8 years.
It is no such thing.
Do you know how often the circuit breakers kick in?
You have no idea what you're talking about.
1 because of HFT market makers your buys and sells are always within 1c of current value (for liquid stocks)
2 because of HFT arbitraguers price differences at different venues are negligible
3 when you trade you don't need to pay the market maker anything. No one forces you to trade with a market maker.
Why?
But the technology already exists to create and detect neutrinos...
If I were buying and selling apples for a profit, would you call that skimming? Or be outraged by it?
What if I used computers to buy and sell apples far quicker and for less "per" profit on each (naturally to the benefit of my customers and suppliers)? What then?
1 you don't have to pay the market maker. Join the ask or bid.
2. Arbitrage ensures that you get the best price regardless of where you trade. Without arbitrage you might get an advantage by choosing a different venue.
3 because of market makers, if you choose to take their price you're guaranteed to get a price within 1c of "current value".
Probably not.
What the fuck are you talking about?
The HFT company wouldn't be able to buy and sell a stock if the issuing company hadn't issued it. That company still has the funds they raised from the IPO regardless of whether some trader buys or sells it.
And how are HFT companies stealing from the investor? The investor isn't forced into buying from an HFT company. And if they do choose to, how would that be stealing?
If I buy and sell apples, I expect to make a profit from it. I doubt many would call that stealing.
If you had it your way, how long would I be forced into holding into a declining stock?
How is it MITM when they aren't in the middle?
Your argument breaks down right here: you DON'T have to buy or sell from the market maker. He has no way of forcing you. The only thing he can do is provide the best prices.
HFT doesn't frontrun. They'd have to get between the customer and the exchange. HFT firms simply trade on the exchanges with public information.
You have to have customers to frontrun, and it's highly illegal.
Why the fuck would Chase sell stocks to JPMorgan at less than the market value?
Apart from being illegal, it would be unprofitable!
Mitm might seem like it's similar to an uneducated idiot, but market making is really very different.
You have no obligation to buy from or sell to a market maker. None at all. You can trade all day on an exchange without ever trading with a market maker.
You don't even have to pay the spread. Just join the bid or the ask.
People go to market makers because they have the best prices. Best prices equals top of book. Only top of book trades. Not best price, no trade. Hence market making only makes money if they have orders at top of book. Qed
Many HFT companies are now officially registered market makers and are obligated to maintain bids and asks.
The choice of 24hours is arbitrary.
Why is it better than 1hour?
How does it benefit anyone?