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NYSE Invites Flash Exchanges To Operate Out Of Its New Digs
Nothing like telling your sworn enemies they are always invited to crash on your couch. Or operate their business out of your brand spanking new facility (for which they will pay a handsome fee of course.)
Securities Industries News reports that the NYSE has officially invited the exchanges at the heart of the Flash scandal, Direct Edge and NASDAQ, to come and collocate their servers out of the NYSE's new Mahwah, NJ facility, which Zero Hedge discussed before. Even after reading between the lines, one is uncertain about the humor factor of this disclosure: after all there is currently an all out war between the exchanges, which the allegedly non-Flashing NYSE has been beating the drum on repeatedly as a marketing point, yet allowing individual firms to provide up to 50% of the program trading volume, thus making one wonder just how diverisifed its roster of liquidity providers really is. It is not surprising that Direct Edge is not too crazy about the "offer."
From the article:
“Come on, Direct Edge. Come on Nasdaq. Come into this data center,’’
said Stanley Young, the chief executive officer of NYSE Technologies
and co-global chief information officer of NYSE Euronext.
The invitation came as Young tried to address how the New York Stock
Exchange – which rose to prominence with its human “open outcry”
trading system -- would take back market share from “faster and
cheaper” competitors, who have thrived by executing orders for
customers in thousandths or even millionths of a second in
all-electronic trading systems.
These “faster, cheaper” rivals, including Direct Edge and
Nasdaq OMX Group, have greatly cut in to the NYSE’s share of equity and
options trading. In the second quarter of 2009, the NYSE Group reported
average daily volume of 3.6 billion shares for NYSE across all U.S.
equity markets. That was 24.9% above the second quarter of 2008, but
9.5% below the first quarter of 2009.
What is the current volume breakdown between the different exchanges (for all those who think that NYSE volume is the end all be all of stock trading):
For August 2009. Direct Edge reported 1.75 billion shares handled per
day, representing 20.0% of NYSE equity volume, 15.6% of NYSE Arca and
NYSE Amex volume and 16.3% of Nasdaq volume. Nasdaq reported its average daily matched volume in all U.S. securities in July was 1.8 billion shares.
So is Flash master Direct Edge going to take the NYSE up on its offer:
Direct Edge is not likely to co-locate any of its servers at the NYSE facility.
Direct Edge’s primary data center is in a non-descript industrial
facility in Secaucus, N.J., operated by Equinix. Not co-locating at
NYSE’s facility in Mahwah can reduce its speed of executing orders for
NYSE-listed equities or options.
“It is one more hop," said Mark Spargo, a sales executive for high-performance computing products at chipmaker Intel.
And as for the ever increasing technological battle to get instataneous execution:
Young’s public offer came at a lunch panel at this high-performance
computing conference, titled “Building the World’s Fastest Trading
Network.”
He said the NYSE has to operate a “world-class messaging network”
and be faster than other exchanges in executing orders. That might mean
overcoming such hurdles as a 40-millisecond delay in England, for
fulfilling regulatory requirements before trades are processed.
He also said there is no delay that will, long-term, be acceptable in processing trades.
“Isn’t it going to be fast enough when you get down to 50
microseconds? No, it’s not. It’s never going to be fast enough,’’ he
said. “In ten years time, it’s going to seem like a lifetime.”
And the conclusion, best read in the context of Ted Kaufman's speech from yesterday:
“The whole way markets will operate is up for grabs,’’ Young maintains.
And guess just who is "grabs-ing" right now, in their quest for complete market landscape domination.
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"All your trade are belong to us."
It's always better to own the casino than to bet against the house.
I have completely stopped trading on RIGGED exchanges like NYSE. If the casino...er..."exchange" blows up tomorrow, it wouldn't bother me one bit.
In other news $1002.50 level in Gold seems to be the new line in the sand for the CRIMEX manipulators. It's surprising how Gold stops dead in it's tracks everytime it so much as even touches it. The manipulation in Gold right now is so BLATANT and in-your-face it's not even funny. Don't these guys realize the idiocy and futility of their actions? The sheer arrogance and hubris of these guys is breathtaking.
MR G - concerning "... the futility of their actions?"
it seems to be in "their" interest to keep the games rolling right up until the casino burns down or my suicide-soldiers bust into multiple trading floors with a spray of tech-9 rounds (or perhaps a few EMP punch devices dropped off at non-descript data-centers)...
http://en.wikipedia.org/wiki/Plutocracy
Forms of control
A Plutocracy is a government controlled by a minuscule proportion of extremely wealthy individuals found in most societies. In many forms of government, those in power benefit financially, sometimes enough to belong to the aforementioned wealthy class.
Classically, a plutocracy was an oligarchy, which is to say a government controlled by the wealthy few. Usually this meant that these ‘plutocrats’ controlled the executive, legislative and judicial aspects of government, the armed forces, and most of the natural resources. To a certain degree, there are still some situations in which private corporations and wealthy individuals may exert such strong influence on governments, that the effect can be compared to a plutocracy. The combination of both plutocracy and oligarchy is called plutarchy.
If there are no forms of control within the society, the plutocracy can easily collapse into a kleptocracy, "reign of thieves", where the powerholders attempt to confiscate as much public funds as possible as their private property. A kleptocratic state is usually thoroughly corrupt, has very little production and its economy is unstable. Many failed states represent kleptocracies.
At this stage, I think the relavent question is "will there be a stock market?", not "is 50 milliseconds fast enough for trade execution?"
BOSTON -- Massachusetts investigators say James S. McDonald, president and chief executive of investment management firm Rockefeller & Co., has died of an apparently self-inflicted gunshot wound.
A spokesman for the Bristol district attorney's office says the 56-year-old McDonald was found in his vehicle at about 3 p.m. Sunday behind a car dealership in Dartmouth.
The spokesman, Gregg Miliote (mill-ee-OH'-dee), says it appears McDonald shot himself but the death is still under investigation.
McDonald had been president and chief executive of the New York investment manager since 2001. The company was started in 1882 by John D. Rockefeller to manage the family's assets.
McDonald, a New York City resident, was also on the boards of NYSE Euronext and CIT International.
Ahem...looks like somebody lost the Rockefeller Mafia some money.
If you read charts tick by tick, it is just pathetic what goes on anymore.
No actual retail volume so essentially running the stops down in the morning and then up during the day is the only way for the HFT supercomputers to make money.
There simply is no other game in town.
You can almost hear the sound of crickets over the drone of the GS/NYSE supercomputer hub.
IMHO, the guys (and gals) setting the stops and "trading" on NYSE are the idiots. I mean how much do you need to be raped and pillaged before you get out of denial and accept that there is no use trading on rigged exchanges like the NYSE (which is WORSE than a casino at this point)?
JUST SAY NO. BOYCOTT THE NYSE AND TELL THEM WHY YOU ARE DOING SO.
Here's a toast for complete and utter irrelevancy of the NYSE in a couple years time. (but not before January 15 2010 plz)
It's utterly irrelevant now. It just hasn't reached mass conciousness though its reaching it at amazing speeds.
Actually the BATS exchange/ecn business model represents the
exchange of the future....
Why ?
With only a handful of employees has quickly gained marketshare vs the NYSE....LSE....
Why ?
Because an exchange has just become software present on a large server base well connected to the internet....
Could be in any country....anytime....
And should locate the exchange where the legal largesse is minimized....
Obviously....this will not be in NY....
Why ?
The costs of labor, buildings, etc. in NY are way too expensive....to be truly competitive....
100 units is a 100 units....Why should there be any difference in costs of electronically transferring an owner of a 100 units ?
At the most it should be 20 cents...if that...
Something that the retail brokers still want $3 to $15 for....
The US exchanges will soon be on non US soil...as the US is too expensive....
Frankly, the entire NYC is utterly irrelevant--not just NYSE. It has no real purpose, doesn't meet a particular need, and has no future. The Barbarians took the new Rome some time ago, in case u hadn't noticed.
Actually ....this is an interesting observation....
Not long ago....being in a Merrill office watching a
pneumatic stock ticker on the wall...trying to stay in good with the local ticket typer so I would be first in line ...next time....paying a few hundred bucks for some
trades that today ....the same trade costs a few cents....
The brokers model has to get its money from somewhere
else....
It looks like electronic front running is one of the ways they are making it....however this is easily corrected by just creating a de-fragmented exchange first come first served ....with a one second minimum....ie BATS...
Politicians and their cronies can bark all day....
But truly....this solves the regulation and
non-gameable exchange problem....
Who would dare leave massive footprints just in front of a public story on a de-fragmented fair exchange ???
A singular exchange is easily watched...regulated...
BATS technology has already proven itself...Now
one just uses it....first come...first served...
for maybe 20 cents per 100 units...at the most....
and this goes for any 100 units.....any asset class...
The brokers need to gain stardom by management
capabilities....but will have to go through price
discovery like anyone else....
If one has too many shares ....this will be a big disadvantage....etc....thus size is meaningful....
But now there is an attempt by BlackRock to privatize public price discovery....This should not be allowed....
But you can bet the SEC will do nothing about it....
Some of them will be working there...they hope...for real $...They want to be just like "Levitt"....
Get paid by the media, the biggest firm, and the SEC....
That's an SEC's employee dream....
And getting to the main point....
NYC is just too expensive...Everything about it...
Who wants to have to pay NYC rates....
Does not make economic sense....yesterday maybe...
Tomorrow ? No....Now...No....
Just to carry this a little further....
Lots of efficient small packets are better
for the market...than those who can create havoc
because of massive positions relative to the stock....
This is where there needs to be common sense....
There should be some form of size per management name constraints....
This aspect is the biggest threat to the markets....
Size does matter....and "small is good "....
Lots of "smalls" are even better....
.......................
What would create this ? Good experiences by
legitimate "smalls"....Lots of "small" make for a healthly market....An efficient BATS model would make this
happen....especially now that a 25 cents move on a $25 stock pays more than interest in a year....and people cannot find jobs....
A few BlackRocks just make for prices wherever the BlackRocks" want them....they can/do/could literally fabricate their bonuses....
Done with the market and banksters, been screwed by them the last few bubbles and not smart enough to trade on my own. I also think that this post has captured the attitude that I see growing around me every day. - Spanish Inquisition
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
A bunch of spiders in their lair... just waiting for the retail customers to stumble in...
Seems to me people have been looking directly at the Fed since it was created-- See, The Federalist Papers and Marbury v Madison.
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
Another Chuck Schumer initiative--no doubt