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As European Banks Pull Out All Stops To Defend Picosecond HFT, Themis Trading Explains The Lies Behind "Providing Liquidity"

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Thu, 03/03/2011 - 10:36 | 1014726 kato
kato's picture

remember when they used to complain about SOES Bandits? that is a quaint long time ago.

Thu, 03/03/2011 - 16:11 | 1016176 Ident 7777 economy
Ident 7777 economy's picture

SOES Bandits and DATEK; how I had forgotten:

http://blog.themistrading.com/?p=1189

Thu, 03/03/2011 - 10:37 | 1014733 Oh regional Indian
Oh regional Indian's picture

HFT is nothing but momentum trading taken to the extreme. it will eat it's own tail at some point. Soon. Which leaves this mockery of a market and the curious question as to why anyone not having "access" woudl play in it?

reminded of Vegas, where the ringing bells made everyone think their next pull would be th eONE.

India is well on it's way to HFT land, with some large brokerage/iinvestment houses allowed to place their "terminals" inside the bourse. Have not seen jerk-around due to them yet, but I think they're just practising.

ORI

http://aadivaahan.wordpress.com/2011/03/01/on-outsourcing-and-its-ills/

Thu, 03/03/2011 - 11:03 | 1014809 Ray1968
Ray1968's picture

Then NYSE leases server space right INSIDE their data warehouse for HFT platforms. The closer you are to the data, the picoseconds you can shave off.

They are making a killing just leasing space. This problem will not go away. They are in it for themselves and don't give a shit about investors.

Thu, 03/03/2011 - 10:38 | 1014734 Convervative Co...
Convervative Connection's picture

I'll be the first to admit that I may not completely understand the situation, but what effect would quantizing all trades to a specific interval (eg, once a minute) have on the market at large? What effect would it have on HFT?

Thu, 03/03/2011 - 10:52 | 1014773 Oh regional Indian
Oh regional Indian's picture

None really. Pandora's box is open.

They will program the bots to crowd into the last/first pico-second of the minute, depending.

 

ORI

Thu, 03/03/2011 - 11:09 | 1014832 Ray1968
Ray1968's picture

Not really. You could establish a 1 second delay on every quote request and order. It would kill the HFT.

Or just outlaw it and prosecute violators. (oops, I said a funny: prosecute violators)

Thu, 03/03/2011 - 12:25 | 1015174 Oh regional Indian
Oh regional Indian's picture

It woudl have to be randomization as said below. Else, I think my point holds. They can sniff patterns, really really fast. it's what they do.

ORI

Thu, 03/03/2011 - 11:23 | 1014887 Convervative Co...
Convervative Connection's picture

When a trade is entered, the quanitization process would ensure that it would be executed in the next batch, however, there would be no guarantee as to when it would get processed in the batch itself. In essense, randomize the execution of all trades within the quanta.

This removes any possible benefit of crowding around the interval.

Thu, 03/03/2011 - 11:46 | 1014962 Bob
Bob's picture

Yeah, you'd still have that problem.  Wonder what the response to proposed randomization would be? LOL

Thu, 03/03/2011 - 10:59 | 1014798 Rogerwilco
Rogerwilco's picture

There are only 450 minutes in a trading day. Think of the consequences! Empowering in-duh-vidual investors at the expense of robotic minions will lead to the loss of hundreds of seven-figure incomes (those good-paying jobs). Let's not forget their kids have to eat too, and what will happen when all those third and fourth vacation homes hit the RE market? Dangerous ideas you speak.

Thu, 03/03/2011 - 12:19 | 1015139 Vendetta
Vendetta's picture

In stuff I've done before for control systems, the smaller the time slice that a piece of data represents, the better the control system can control and manipulate a system.  They are sometimes called predictive/adaptive modeling algorithms.  Larger time slices means less control and less manipulative capability

Thu, 03/03/2011 - 10:49 | 1014759 fragrantdingleberry
fragrantdingleberry's picture

"Providing liquidity." Is that like a money shot?

Thu, 03/03/2011 - 11:31 | 1014907 ebworthen
ebworthen's picture

lol

Yeah, drink some pineapple juice and a quart of water an hour before, she'll appreciate it.

Thu, 03/03/2011 - 10:50 | 1014766 gordengeko
gordengeko's picture

Yes, we've been trodding on the winepress much too long:
Rebel, rebel!

Babylon system is the vampire, yea! (vampire)
Suckin' the children day by day, yeah!
Me say: de Babylon system is the vampire, falling empire,
Suckin' the blood of the sufferers, yea-ea-ea-ea-e-ah!
Building church and university, wo-o-ooh, yeah! -
Deceiving the people continually, yea-ea!
Me say them graduatin' thieves and murderers;
Look out now: they suckin' the blood of the sufferers (sufferers).
Yea-ea-ea! (sufferers)

Tell the children the truth;

Thu, 03/03/2011 - 10:50 | 1014767 Bansters-in-my-...
Bansters-in-my- feces's picture

And the Rothschilds smile...:0)

Thu, 03/03/2011 - 10:57 | 1014787 Bruce Krasting
Bruce Krasting's picture

The only possible outcome will be another crash. I look forward to that. TD will throw egg on all of these folks (including Mary Schapiro) when it happens.

They just will look dumb.

 

Thu, 03/03/2011 - 11:11 | 1014794 michigan independant
michigan independant's picture

Scalpers, and they just measure the standard deviation. Until the Consumer chooses to scrape these leeches off they are Slaves. As long as the BORG "Borg voluntarily submit to cybernetic enhancement as a means of achieving what they believe to be perfection (they also force their idea of perfection on others)gets there dues on the beltway there fine as they piss on you and tell you its raining crowd. Overall like most normal Citizens we take care of our family and friends not at the expense of others on this blue speck on the cosmos.   

Thu, 03/03/2011 - 11:06 | 1014823 bunkermeatheadp...
bunkermeatheadprogeny's picture

"Providing liqudity" to the "frozen credit market" was also the lie to justify TARP.

Thu, 03/03/2011 - 11:14 | 1014855 lynnybee
lynnybee's picture

Criminals-gone-wild......Charlie Sheen is a chiorboy compared to these guys .

Thu, 03/03/2011 - 12:38 | 1015231 Vendetta
Vendetta's picture

indeed.  Another distraction from what is actually important

Thu, 03/03/2011 - 11:26 | 1014893 Doubleguns
Doubleguns's picture

So now the computers are going to front run us by the equivalent of 31,700 years. They could dance a jig around us whilst slapping us silly for years and we still would not know that it was coming.

Thu, 03/03/2011 - 11:46 | 1014961 myztix
myztix's picture

Take a look at BSFT

Taking HFT to the max.

Thu, 03/03/2011 - 11:54 | 1014997 Dr Hackenbush
Dr Hackenbush's picture

Churning is a phishing scheme, plain and simple, seeking whom $ they may devour.    

Thu, 03/03/2011 - 12:02 | 1015039 djsmps
djsmps's picture

You left out the most famous European Euphemism:

resettlement = death

Thu, 03/03/2011 - 12:12 | 1015095 simpleminds
simpleminds's picture

Welcome to the new mafia.  Makes the old one look like amatuers.

Thu, 03/03/2011 - 12:14 | 1015107 myztix
myztix's picture

more like ninjas or assassins..

Thu, 03/03/2011 - 12:52 | 1015294 lynnybee
lynnybee's picture

the more i know (primarily by reading ZEROHEDGE, which requires a lot of studying & trying to understand things that i have never been exposed to before) the more i have become thoroughly depressed & disgusted.     i feel i must leave the country & convince my adult kids to leave with me......... but, where to go when you are old ?    i cannot start over, no country would take me .   

Thu, 03/03/2011 - 15:18 | 1015956 scratch_and_sniff
scratch_and_sniff's picture

relax fella, its not the end of the world, dont take everything you read so seriously, a lot of it is just horseshit and general speculation at best. Have a beer and think about something else for a while, things are going to do what they are going to do, regardless of what anyone says.

Mon, 03/07/2011 - 20:46 | 1028111 lsjcma
lsjcma's picture

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