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Saluzzi Educates MSM On PT, Does Not Buy Books

Tyler Durden's picture


Irene, I would love to get a copy of your book. Are you willing to exchange one Digital Dickweed coffee mug for a few hundred copies? I am sure you have them lying around, and it sounds about equitable.

Also, good thing of Irene to admit that any variant of forntrunning is illegal. We are with you!


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Fri, 07/24/2009 - 14:37 | 14272 agrotera
agrotera's picture

I would bet that CNBC is trolling your site for their "top" stories of the day now, so they can diffuse their image as wallstreet shills.

Fri, 07/24/2009 - 16:08 | 14413 Freeple
Freeple's picture

To me, that would be the point - forcing MSM to report the truth again, instead of a bunch of fantasy.

Fri, 07/24/2009 - 19:17 | 14645 Anonymous
Anonymous's picture

and that dumb biatch is who they get to defend gs. she should study 2nd grade rational playground argument in addition to the math she finds so important.

Fri, 07/24/2009 - 14:43 | 14287 Anonymous
Anonymous's picture

Proving once again CNBC now follows Zero Hedge....its about time you provided something real instead of BS

Fri, 07/24/2009 - 14:46 | 14290 Anonymous
Anonymous's picture

Irene give us proof in the first few seconds of her speaking that there is no such thing as free open efficient markets. (1:55 I believe). Tell me retail traders can compete in this environment. Best of luck to you guys and gals trying to compete with PhDs in Mathmatics and Computer Science on a daily basis. Eugine Farma is full of shit. Efficient Market Hypothosis my ass.

Milton Friedman's Ghost

Fri, 07/24/2009 - 14:52 | 14300 Anonymous
Anonymous's picture

retail investors have never been able to compete. Also, if co location is eliminated, rebate trading killed, and flash trades declared illegal, you will still have short term trading and algo trading accounting for most of the volume on the exchange. Further, anyone who has an office in NYC will still have an advantage to someone who is further away. Speed and being close will matter no matter what laws or regulation you pass.

Fri, 07/24/2009 - 18:53 | 14621 whacked
whacked's picture

Yes, kiddies out there study your math ...


If Irene roll her eyes on more time ... bigger .. .. nothing incenses me more than that, lost interest on the 4th time ..


Irene ... you are not at school anymore .. no longer do you have to express yourself by rolling your eyes and having a 100 words a minute without a breath ..

Fri, 07/24/2009 - 14:52 | 14298 Anonymous
Anonymous's picture

I love the part where he says "make sure your fuses are ok"

Fri, 07/24/2009 - 14:52 | 14299 deadhead
deadhead's picture

Here is the verdict:

Saluzzi and the truth won.  Irene, you lost.

I will also give credit to MCC and Steve Liesmann for asking the properly tough questions.  I wish they would follow that line of questioning on a consistent basis.

Fri, 07/24/2009 - 18:03 | 14572 Anonymous
Anonymous's picture

AMEN to that!!
CNBC needs to be more objective from time to time and really try to get at the TRUTH instead of following their GE-controlled agenda all of the time. Why do they think they are losing so many viewers right now? (Might as well be watching American Idol or some schlock)

Wed, 07/29/2009 - 04:35 | 17950 Anonymous
Anonymous's picture

I don't think CNBC was at fault in this instance... they were more for Saluzzi than Irene... some people on this site are too angry.

Fri, 07/24/2009 - 14:53 | 14302 Anonymous
Anonymous's picture

This comes down to the speed of light. I get signals slightly slower because I'm on the West Coast as opposed to the East coast. If you put the server in the same room as the exchange, all your doing is lowering the distance the signal has to travel. This has nothing to do with front running. It has *everything* to do with the speed of light. Are you going to start banning people from building datacenters closer to stock exchanges next?

Fri, 07/24/2009 - 14:56 | 14304 Anonymous
Anonymous's picture

finally, someone gets it.

Fri, 07/24/2009 - 15:06 | 14322 Anonymous
Anonymous's picture

You are a retail sitting in the west coast. You are irrelevant to HFTs. Most HFT manipulation is done on the colocated servers in the exchange. You are confusing a retail order execution time with HFT.

Fri, 07/24/2009 - 15:08 | 14328 Anonymous
Anonymous's picture

There is a latency difference even between computers sitting in New York on optical lines. That is what colocating removes. I was trying to demonstrate an example. Even someone with a direct optical line to the exchange who was on the west coast, for instance, would be at a disadvantage. The speed differences between a computer in New York and one in the exchange, while small, provide a small edge.

Fri, 07/24/2009 - 15:13 | 14341 Oso
Oso's picture

Read the NYT piece today and then revise your comments above.  the colocation is not the issue.  "sniffing" institutional orders is the issue.

Fri, 07/24/2009 - 15:16 | 14344 Anonymous
Anonymous's picture

Honestly I've heard a ton of people claim that colocation in and of itself should be illegal. Sniffing can be done legally, but flash orders may be an issue. The problem is that there are people running around who want to ban colocation. If the problem is flash orders, complain about that. Don't lump all HFT into the same boat.

Fri, 07/24/2009 - 15:18 | 14349 Anonymous
Anonymous's picture

Oso - so, to be clear, you have an issue with people looking for supply and demand imbalances and trading on those? Good luck getting rid of that business tactic.

Fri, 07/24/2009 - 15:20 | 14355 Anonymous
Anonymous's picture

Seriously I can see supply and demand imbalances half the time just by watching order flow because some idiot doesn't know how to conceal a large order. You don't even have to execute trades sometimes to know when institutions are buying.

Fri, 07/24/2009 - 16:15 | 14423 dnarby
dnarby's picture

Can't sniff without a really low latency, thus the co-location problem.

Fri, 07/24/2009 - 15:27 | 14359 Cheeky Bastard
Cheeky Bastard's picture

dude its not the speed of light thats questionable here, or the location or co-location of the servers ... it's about paying to the exchanges for those 3 microseconds of displaying the price, and that happenes when investor submits the order and for three microseconds the order flashes nude infront of drooling HTF which then buys as many shares of taht XYZ company at lets say 50$ and the order is executed for 50.01 cent .. so they pocket one cent on that trade ... and to know that this shit equals to 21 billion in profits and 70% of the volume says only one thing.... this market is a fucking disgrace to every investor who ever purchased a stock ... oh and if you didnt get what i was saying ... its IT ALL ABOUT THE BOUGHT 3 MICROSECONDs BETWEEN THE ORDER IS SUBMITED AND BEFORE ITS EXECUTED FOR ONE CENT A SHARE HIGHER THAN THE ORDER PRICED THE SHARE ..

Fri, 07/24/2009 - 15:36 | 14379 Anonymous
Anonymous's picture

There needs to be a standardization on the time frame we are talk about. HFT transactions cannot be executed in a 3 microsecond period. It is a really low number. It has to be atleast 2 digits of microseconds for the standalone hardware to crunch the proprietary algorithm and then it is in factor of microseconds upto milliseconds. The guy on Bloomberg that TYD linked started talking about nanoseconds.

Fri, 07/24/2009 - 15:49 | 14393 Cheeky Bastard
Cheeky Bastard's picture

actually you are wrong ... i didn't pull those 3 microseconds out of my ass, and i didn't say that the execution time was 3 microseconds but the time the owner of HTF buys from the exchange to flash the order price ... the execution time is what you wrote, i was talking about the unfair buying of 3 microseconds of time to flash the price of the share that has to be executed, and executed it is, for one cent higher than the order price was .... and who's the sucker there ... 1) every small investor 2) every retail investor 3 ) the capitalist system itself ... the machines will soon take over, and when they learn to upgrade themselves and reproduce themselves, humanity will be redundant ...

Fri, 07/24/2009 - 22:56 | 14831 Anonymous
Anonymous's picture

Well put! Whether it's for 3 microseconds or 3 for days, when you show the incoming orders to one party instead of to all parties, that's not a "free market" at all. And when the other parties wise up, I suspect that they will immediately lose trust in you, and immediately after that will start finding ways or creating ways to take their business elsewhere. Greed has a habit of thinking so short-term that it kills whatever goose was laying golden eggs for it.

Sat, 07/25/2009 - 00:57 | 14944 Cheeky Bastard
Cheeky Bastard's picture

AMEN brotha .... thats true .. if you have ever been in a VC meeting the first thing those dudes want to know if you have integritiy and if you are fair ... everything else comes after that ... so as you put it, the customers will soon flee from those who front-run this market just for the reason they dont want to be associated with something that is fradulent and without integritiy ... the more media exposure this thing gets the more will people know about the shit thats happening behind the scenes, and the more they now the less they will trust those who have this temporal advantage over a loud majority .... and i trully believe no one would want to be linked or associated with this fraud when charges, bu civil and criminal, start to fly all over the place ... 

Fri, 07/24/2009 - 15:27 | 14365 akreitman
akreitman's picture

   It has nothing to do with the speed of light.  Network latency is the killer, all those switches and routers between you and the exchange.


Fri, 07/24/2009 - 18:00 | 14566 Anonymous
Anonymous's picture

Network latency, of course, is fundamentally constrained by the speed of light. Or the speed of electrons in copper, which is also a function of the speed of light. In either case, its a physics problem.

Sat, 07/25/2009 - 00:47 | 14936 Anonymous
Anonymous's picture

it may be a physics problem but as your
respondent noted there is much more standing
between point a and point b than a wide open

any way the co-location issue as someone else
noted is a is a false issue

Fri, 07/24/2009 - 14:53 | 14303 Anonymous
Anonymous's picture

They got rid of SOES Bandits, they will get rid of these leeches.


Fri, 07/24/2009 - 14:59 | 14307 Anonymous
Anonymous's picture

and then what, you will start making more money?

Fri, 07/24/2009 - 14:57 | 14305 Anonymous
Anonymous's picture

Hilarious - she will not say front running isn't happening even though she says it's illegal.

Fri, 07/24/2009 - 15:02 | 14314 Anonymous
Anonymous's picture

um, just because its illegal doesnt mean its happening. You may want to re read your post and ask yourself if your qualified to make fun of her.

Fri, 07/24/2009 - 15:09 | 14330 Anonymous
Anonymous's picture

ya, of any of the articles related to hft, this one holds the most merit. Flash orders are clearly a bs attempt at trading under a loophole, and does not comply with the spirit of reg nms in my opinion.

Fri, 07/24/2009 - 15:06 | 14323 FatuousTwat
FatuousTwat's picture

You are totally missing the point.

Fri, 07/24/2009 - 15:09 | 14329 Anonymous
Anonymous's picture

You may want to read your first post and ask yourself if you know the difference between "you are" and "your" dillweed

Fri, 07/24/2009 - 15:11 | 14334 Anonymous
Anonymous's picture

its a comment on a blog not an essay, sorry I didnt do a grammer and spellcheck retard. Perhaps you should review the use of double negatives

Fri, 07/24/2009 - 15:13 | 14339 FatuousTwat
FatuousTwat's picture

mmmm herbs

Fri, 07/24/2009 - 15:09 | 14331 Anonymous
Anonymous's picture

go away troll

Fri, 07/24/2009 - 15:00 | 14309 Anonymous
Anonymous's picture

I hear that books are a good thing to keep in the bathroom, you can always use the pages to wipe if you run out of paper.

Fri, 07/24/2009 - 15:01 | 14310 Gwaihir
Gwaihir's picture

I not 100% sure she read the book she wrote.


Sat, 07/25/2009 - 01:06 | 14950 Cheeky Bastard
Cheeky Bastard's picture

im not sure she even wrote the book she wrote

Fri, 07/24/2009 - 15:07 | 14312 Mako
Mako's picture

I am going to Vegas and play some poker, I pay the dealer a cut if he lets me see the cards before they are dealt.  

Sounds good to me.  Heck, I would gladly give the dealer a cut.

She say's illegal than goes on to say they are doing it and than says it's ok.

I love watching an end to a system.

Tyler, btw I watched "Fight Club" for the first time the other night.  I can see why you picked your name.  Good stuff.



Fri, 07/24/2009 - 15:03 | 14317 svendthrift
svendthrift's picture

That woman was horrible. Who does she work for?

Fri, 07/24/2009 - 15:24 | 14360 Anonymous
Anonymous's picture

yeah, but hot.

Fri, 07/24/2009 - 18:36 | 14603 ghostfaceinvestah
ghostfaceinvestah's picture

herself by the looks of it.

she should have done herself a favor and stayed in relative anonymity.

i notice an article just flashed across my Bloomberg that Shumer is going to introduce legislation to ban flash quotes.  it is picking up steam, once again TD is in front of the issue.

Fri, 07/24/2009 - 15:07 | 14324 Anonymous
Anonymous's picture

who still watches cnbc

Fri, 07/24/2009 - 15:10 | 14332 Mako
Mako's picture

I have no idea why people watch that junk. 

I will watch a clip on the internet but all these people need to turn that channel off.

Fri, 07/24/2009 - 15:11 | 14333 Cheeky Bastard
Cheeky Bastard's picture

i so want to punch  this chick with a polish accent in the face, and this is the first time i ever wanted to hit a girl ... but how stupid you have to be to think that anyone with an IQ over 20 will believe the blatant and illogical lies she says during this interview is beyond me ... jesus christ, you dont even need to hear about HTF to know that the closer the location to the focal point is the exchange of data is faster because the photon needs to travel less distance between a central server and a sever located only a few feet form the central server, than for instance the same data travelling from lower manhattan to Jim Bob Dell Laptop located in Des Moines .... and she constantly says it's illegal, but that does not make it a) not possible and b) that it isnt done this same moment ... this bitch is as thick as tits cabreras .... well ... tits ... the first rule of investment banking is ..... learn how to lie .. this bitch knows nothing of that ... 

Fri, 07/24/2009 - 15:11 | 14335 Dr Hackenbush
Dr Hackenbush's picture

"Able Alpha Trading" 

I'm looking for a good Alpha lead dog to front-run my team.  Perhaps I'll be in touch with this mutt! 


Fri, 07/24/2009 - 15:13 | 14340 Hondo
Hondo's picture

Irene wasn't very creditable at all.  It sounds more like pay to trade.  It’s happening, it’s a scam and the exchanges are trying to boost volume and revenue because they need to show profits.  Buyer beware!

Fri, 07/24/2009 - 15:14 | 14342 Mos
Mos's picture

Can't really expect the exchanges to handicap certain participants based on their distnace from the exchange.  However, if these "algos" can pay to see orders before anyone else and then place an order ahead of the original order that certainily is frontrunning.  I liken it to a scalper waiting outside a movie theater not knowing which movie will be the hot one for the night.  He waits for people to get in line for the movie, jumps them in line, then scalps them tickets at a higher price.  Someone correct me if this analogy is different from what these HF traders are doing.

Fri, 07/24/2009 - 15:18 | 14346 Anonymous
Anonymous's picture

I love your picture Mao Bernanke!

Fri, 07/24/2009 - 15:44 | 14389 agrotera
agrotera's picture

me too!

Fri, 07/24/2009 - 19:23 | 14652 Gordon_Gekko
Gordon_Gekko's picture

Agreed. It's wonderful!

Sat, 07/25/2009 - 01:08 | 14951 Cheeky Bastard
Cheeky Bastard's picture

kissy kissy <3 ben-mao

Fri, 07/24/2009 - 15:23 | 14358 Anonymous
Anonymous's picture

The scalper analogy is fine. Although, isnt that most business in America. All retail chains, car dealerships, restaurants.....all middlemen watching for whats hot to sell and they jump all over it, load up, and sell to the masses.

Fri, 07/24/2009 - 15:19 | 14354 Anonymous
Anonymous's picture

O Gawd. Please give me BNN where nobody speed-talks and the guests aren't screaming at each other. By the way, the woman is a schill and sounds like she would sell her mother if she could make a buck.

Fri, 07/24/2009 - 15:26 | 14363 Anonymous
Anonymous's picture

Yeah. It has become quite a habit at CNBC where everyone is shouting simultaneously like a high school brawl. It's like an internal competition going on there, where the person whose last shout is clearly audible is the winner. WTF ? These are not journalists.

Fri, 07/24/2009 - 16:18 | 14429 Anonymous
Anonymous's picture

Agreed. The whole show is skewed towards the entertainment function, not an informational one. What that episode gave to an average person who does not understand what the issue with High-Frequency Trading is? Hosts hardly understand the topic, while guests scream at each other trying to push its own point. That happens regularly with that format of the show, because it looks more like a mixed-fight championship rather than a serious conversation about complex topic.

Fri, 07/24/2009 - 15:22 | 14357 Anonymous
Anonymous's picture

Irene has a high level of disdain for the "slow" retail broker. If she was on the show to assure the retail investor that they shouldn't fear HFT, she was a complete failure.

Fri, 07/24/2009 - 15:28 | 14367 Anonymous
Anonymous's picture


She said "You trade like a turtle", and compared non-HFT to using a "slide rule".

Is that supposed to make us all "okay" with HFT? She failed miserably at making her point.

Fri, 07/24/2009 - 15:24 | 14361 Anonymous
Anonymous's picture

it's about math so it has to be ok.
can a mathematician stop jerking off for a while and look into this.
sorry about that crack about jerking off.

at one point in time, you couldn't be an authority on God if you didn't know latin (and know how to write).

if you don't know math, you won't be able to engage in this discussion.
can a mathematician stop jerking off for a while and look into this.
sorry about that crack about jerking off.
but seriously, most of your work is jerking off.

Sat, 07/25/2009 - 01:14 | 14955 Cheeky Bastard
Cheeky Bastard's picture

mathematics is per se neutral like everything else ... but you can either use it to calculate the necessities for outer space travel or you can use it for front-running the complete equity markets .... 

Fri, 07/24/2009 - 15:27 | 14364 Anonymous
Anonymous's picture

She made herself look extremely bad.

She refused to answer the question about frontrunning over and over again.

On top of that, she's an unbelievably annoying woman:

"You trade like a turtle"

"You don't have the proper skills"

Does she realize she's referring to the other 99.99% of investors? What a clueless bimbo

Fri, 07/24/2009 - 15:30 | 14371 Anonymous
Anonymous's picture

The MOD is go on the offensive, heap scorn and ridicule when your trousers are on fire. Yeah like that's going make one credible and an authority on the topic.

Fri, 07/24/2009 - 18:33 | 14599 ghostfaceinvestah
ghostfaceinvestah's picture

Look at her educational background, she is an electrical engineer with a degree in financial engineering, she is in love with the math.  Like most of these traders, she probably doesn't understand what she is even trading.  to her there is no ethical dilemma, the "dumb" will be scalped by the "strong".  She even mentioned it in the clip, something about "people should learn math."  I know the type well.

Someday this HFT stuff will go away, either by legislation or a market failure a la LTCM, and she will be be out pitching her skills as a "risk manager" or something similar.

Seen this play before.

Fri, 07/24/2009 - 15:29 | 14369 Anonymous
Anonymous's picture

Dear Ms Irene Aldridge doesn't quite seem to get the issue of flash display quotes and the inequality their existence and abuse creates in the marketplace. As a result she's not talking about the same subject as the rest of the panel.

She just keeps on blabbing about computerized trading in general, just like anyone in the studio or intended audience wouldn't know what it means. What a moron.

Fri, 07/24/2009 - 15:30 | 14370 Anonymous
Anonymous's picture

There was some guy who played internet poker but found a way to see everyone elses cards while playing. It was in the news he made a bunch of money then got caught. Sound familiar? Well maybe not the got caught part.

Fri, 07/24/2009 - 15:30 | 14372 Anonymous
Anonymous's picture

The CNBC chick is annoying as hell. Do you guys actually sit around with these people spitting out words all day. She literally spits when she talks. I thought I was watching a SNL parody for a minute, but she was taking herself way too seriously.

Fri, 07/24/2009 - 15:32 | 14373 steve from virginia
steve from virginia's picture

The veils have been dropped on this market and its sausage- making machinery is plain to see. I imagine this manipulation was underway from 2002. It's been hiding under the 'real' (value/performance) trading/hedging and quietly pushing stocks higher the entire time. Now that the retail trade has vanished or been busted out, the (remaining) institutions are forced to choose between buying their own co- locations/HFT schema or having their portfolios eroded.

'Irene' is simply rationalizing theft, because its 'successful'.


Sat, 07/25/2009 - 01:21 | 14956 Cheeky Bastard
Cheeky Bastard's picture

try 1987 ... they deliberately turned the puters off to see what happens ... and what happened was one of the largest DJIA drops in the history + a recession ...and that was back in 87 ... can you even imagine the power they concentrated since then ... its fucking mind boggling

Fri, 07/24/2009 - 15:32 | 14374 Anonymous
Anonymous's picture

Mos you just lifted that from another article posted here - given you mildly modified it but don't pass off others thoughts as your own

Fri, 07/24/2009 - 15:35 | 14377 Anonymous
Anonymous's picture




What's wrong with that?

Fri, 07/24/2009 - 15:35 | 14378 Anonymous
Anonymous's picture

OK you guys might know about money but when it comes to physics and latencies in data transport and processing, you are occasionally full of shit.

Here are the points where latency would realistically matter in data processing:
- 1. message switching (can be made fast, but is never zero)
- 2. database access (yikes. slow)
- 3. processing / running the algorithms (highly variable, clocked by 2)

When talking about network speeds, the estimates a few years ago were that we were seeing consumer-grade bits on the Internet move at about 1/2 light speed, through lots and lots of switches, each one adding some delay.

In terms of being inside the colo, or nearby in a building... no difference, guys. the distances are too small, and ANYONE no matter where located, would accept a routing that involved many hops, as that is obviously a disadvantage... so if you have a dedicated circuit from here to there, the disadvantage is minimal but as a systems architect, i'd always put the gear as near the place it's used as possible. That's not cheating; that's clean, rational design.

The colo's are colo'd because it's hella cheaper to plug a local wire in to the nearest switch than to rent the lines needed to send high speed data across the continent without switching delays (much greater than light-speed issues).

2/3: IMO the delays due to items (2) and (3) are where the advantage exists. Data processing and "thinking" - even in very fast computers - is the slowest part of the process.

I haven't seen the code, but any approach that can parallelize the problem and respond with minimal "thinking" is one that would clearly have an advantage.

And all THAT said, the really most direct way to grab an assured advantage is right in front of you, and you're missing it: that's to slow down or intercept (however briefly) any orders you can get into your circuits and out of someone else's.

... and in its simplest form, that's the "ping" that's finally being written about... which IMO will turn out to be the most significant feature of the asymmetries created by HFT...

The discussion gets carried away with speed-of-light madness, but IMO this is more about access to examine and intercept ordinary order flow at the speed of transactions (slow, in nature's terms), not about encouraging photons to fly a little faster.

your pal,
James O' Boston

PS Quantum trading. That's where the money will be (or was, depending on your beliefs about quantum computing)

Fri, 07/24/2009 - 16:01 | 14407 Anonymous
Anonymous's picture

Oh sorry, forgot to mention this corollary.. no new info here, just another angle that helps explain the true advantage...

in terms of accelerating the slow items, 2 and 3, the best way to be able to write code that doesn't have to think fast, is to be able to ANTICIPATE what you're going to need to think about at some future time (even if it's not very far in the future)

the way to see the future in the market is to see the book before someone else can see the book, and the best way to see the book before someone else can see the book, is to own or manage the book.

that's how one might bend time in the markets... not by using faster photons, but with foreknowledge... even a wee bit of advance information would allow a lot of parallel pre-computing to take place, such that the front-edge trading systems would be required to carry out as little thinking as possible before executing trades.

granted, that does cycle back /toward/ the conspiracy-laden tales surrounding DTC, except that they're on the wrong end of the trade.

Fri, 07/24/2009 - 15:38 | 14382 Anonymous
Anonymous's picture

If you are not a transnational co-located (and US taxpayer subsidized) brokerage, then you are a turtle. If the turtles would all just start their own hedge fund(s) and develop their own proprietary HFT software and co-locate w/ all of the markets around the globe, then the playing field would be level once again! It's so simple!

It's not that PT is 'illegal' per se, it's just that it's only available to market makers... don't hate!

Fri, 07/24/2009 - 15:39 | 14384 grunk
grunk's picture

Irene chirps the company line to keep herself in Jimmy Choo's.  There is a recession on, ya know.

Fri, 07/24/2009 - 15:42 | 14387 Anonymous
Anonymous's picture

My favorite part is when Irene says that Saluzzi does HFT but then saying that he does it manually not using computers. Huh?

Fri, 07/24/2009 - 15:45 | 14390 Anonymous
Anonymous's picture

Before algos, one could trade a lot of shares manually. Now it's done largely by algos instead of human intuition. Believe it or not, actual humans were at one point capable of doing 5 to 10 percent of a stock's volume with breaking a sweat.

Tyler is great on a lot of things. Equity micromarket and trading is definitely not his forte. He exposes a lot about HFT to people but cloaks it too much in conspiracy theory speak.

Sat, 07/25/2009 - 01:41 | 14967 Cheeky Bastard
Cheeky Bastard's picture

you are WRANG !!!!1 ... it's not about the HTF goddammit, nor the configuration of the supercomputer, nor is it about the location or co-locations ... its about FLASHING THE PRICE OF THE ORDER BEFORE THE ORDER IS EXECUTED .... get it ... it's ALL about knowing what cards all the other guys have ... and the problem is in THE EXCHANGE ITSELF WHICH GETS A PART OF THE 1 PENNY P/S FOR WHICH THE ORDER IS FINALLY EXECUTED ....  but you seem to be slow, so i'll explain it metaphorically .... there is you and there are other guys round the poker table in Vegas ... and you have an option with the casino which says that the casino will FLASH, for some small period of time, all the cards the other guys have, and you will compensate the casino by giving it a x% of your gains ... of course the casino says that the option does not need to be executed, but if you want to, you can for a certain price ... do you get it now, or do i need to explain thing a bit further ... and stop with the conspiracy bullshit, you're only showing to all of us that you don't understand a lot of things, and so you make it easy on yourself and dismis them as conspiracy theory, because your cognitive development is not developed enough to interpret or understand complex phenomena. 

Fri, 07/24/2009 - 15:50 | 14396 Anonymous
Anonymous's picture

Also the part when she describes arbitrage and they cut her off saying they understand what that is already, it isn't a new concept.

Fri, 07/24/2009 - 15:51 | 14398 Anonymous
Anonymous's picture

you have a counter-argument and a book.
math and science was mentioned.
that's it, the public is done with this.

rule number one in propaganda:
you just need to introduce doubt in the conversation to cool off the heat.
this is going nowhere.

Fri, 07/24/2009 - 16:08 | 14408 mdtrader
mdtrader's picture

minus 8% MSFT and minus 8% Amazon after 10 days up and 100 points on the S&P and 200 points on the Nasdaq 100, and the market still doesn't go down.

Conclusion buy long dated puts and go on holiday.

Fri, 07/24/2009 - 16:06 | 14411 D.O.D.
D.O.D.'s picture

In Sports, regarding steroids, to paraphrase Irene...

"All we are doing is what nature has been doing for centuries, we are merely introducing the muscle generation manually."

Sat, 07/25/2009 - 01:42 | 14971 Cheeky Bastard
Cheeky Bastard's picture


Fri, 07/24/2009 - 16:08 | 14412 Anonymous
Anonymous's picture

Lets face it, this blog is fun but the 100% negative stance 100% of the time has made it worthless as a tool for making money.

And in the end thats what counts.

Fri, 07/24/2009 - 16:15 | 14425 Anonymous
Anonymous's picture

you want to know how to make money from a guy named tyler durden?
you're right, the laughs keeping coming.

Fri, 07/24/2009 - 16:28 | 14444 Anonymous
Anonymous's picture

Did you even watch/read Fight Club: "You are not your bank account". Make your money somewhere else. Fuck off

Fri, 07/24/2009 - 16:33 | 14457 Anonymous
Anonymous's picture

anonymous again,
i have to apologize for my last remark. my pedicure just got cancelled.
i think this site is dedicated to providing information to help you make wiser decisions.

sorry again for the last remark.

Fri, 07/24/2009 - 16:43 | 14471 Anonymous
Anonymous's picture

sorry about your pedicure
wiser decisions, hm to a certain extent, really depends on you though. you can study manifesto to get a sense what site is dedicated to.

Fri, 07/24/2009 - 16:38 | 14466 Veteran
Veteran's picture

Since when was this blog about making money?  And by the way, in the end might makes right.  Your money ain't going to protect your sorry ass from the man with the gun

Fri, 07/24/2009 - 17:38 | 14545 berlinjames02
berlinjames02's picture

Yup... it'll be like the Incas bringing the Conquistadors gold and silver.


I'm glad I'm the guy with the M4.

Fri, 07/24/2009 - 18:23 | 14590 ghostfaceinvestah
ghostfaceinvestah's picture

you obviously haven't been buying oil like I have been telling you.

Sat, 07/25/2009 - 03:09 | 14993 Cheeky Bastard
Cheeky Bastard's picture

if you validate your existence with concentrating the biggest possible amount of FIAT currency than you certainly must be one lone SOB .... like it was said in FC " you're not your bank account "  .... and if you think that money is the answer to the eternal metaphysical question " what is our purpose, and what is the purpose existence " then, again, i feel sorry for you ... oh and yeah ... fuck off ... you're in the wrong place my son, and Gordon Gekko is an extinct specie ..

Fri, 07/24/2009 - 16:14 | 14419 deadhead
deadhead's picture

can't wait for robotrader's summary today...COF is definitely a candidate

Fri, 07/24/2009 - 16:14 | 14422 Stuart
Stuart's picture

As soon as Irene wouldn't answer the question about whether front running takes place, you knew the jig was up and she was on the wrong side.    Irene, do people run stop signs?  Answer: it's Illegal.  ....  You weren't asked if it was illegal, do people do it.  Yes or No.   She still wouldn't answer.    Reminded me of Geithner deflecting difficult questions.    Saluzzi wins on TKO.



Fri, 07/24/2009 - 16:21 | 14433 Anonymous
Anonymous's picture

saluzzi won? are you kidding me?
watch it without the sound. there's another person with a counter-argument and a book.
this is how propaganda works.
i may be wrong and this gains momentum, but i hear that crooks are walking around freely on wall street, so i doubt i am wrong.

Fri, 07/24/2009 - 17:09 | 14512 Anonymous
Anonymous's picture

add to that that the girl is quite attractive. the visual battle is definitely in her favour, not sure if the opponent choice for Saluzzi was intentional or not, but wouldn't be surprised. or maybe we are just getting too paranoid

Fri, 07/24/2009 - 18:19 | 14587 Anonymous
Anonymous's picture

i have a bag over my head. no, i'm not being too paranoid.
saluzzi was interviewed on bnn.
this issue has now passed through the mainstream media and is gone.
another rule of propaganda: don't let anything fester in the minds of people, including the innernet.
take control of it.

Fri, 07/24/2009 - 17:10 | 14514 Stuart
Stuart's picture

oh, you mean that chicken shit that didn't have the cajones, even though she doesn't have cajones, to answer a straight question....  Even the CNBC hosts clued in to that.

Fri, 07/24/2009 - 18:49 | 14615 McLuvin
McLuvin's picture

hahahaha...that reminds me of the "no testicle" support group scene in Fight Club and Marla's expression of how she belongs there more than Jack.

Fri, 07/24/2009 - 16:15 | 14424 Stuart
Stuart's picture

hey, what happened to the math questions?   I liked those.   

Fri, 07/24/2009 - 16:29 | 14448 Anonymous
Anonymous's picture

Those two-digit ones were awesome.

Fri, 07/24/2009 - 16:16 | 14427 Anonymous
Anonymous's picture

Mr. Denninger whacks it out the park yet again.

"But then the NY Times gets the bottom line wrong:

The result is that the slower-moving investors paid $1.4 million for about 56,000 shares, or $7,800 more than if they had been able to move as quickly as the high-frequency traders.

No. The disadvantage was not speed. The disadvantage was that the "algos" had engaged in something other than what their claimed purpose is in the marketplace - that is, instead of providing liquidity, they intentionally probed the market with tiny orders that were immediately canceled in a scheme to gain an illegal view into the other side's willingness to pay.

Let me explain.

Let's say that there is a buyer willing to buy 100,000 shares of BRCM with a limit price of $26.40. That is, the buyer will accept any price up to $26.40.

But the market at this particular moment in time is at $26.10, or thirty cents lower.

So the computers, having detected via their "flash orders" (which ought to be illegal) that there is a desire for Broadcom shares, start to issue tiny (typically 100 share lots) "immediate or cancel" orders - IOCs - to sell at $26.20. If that order is "eaten" the computer then issues an order at $26.25, then $26.30, then $26.35, then $26.40. When it tries $26.45 it gets no bite and the order is immediately canceled.

Now the flush of supply comes at, big coincidence, $26.39, and the claim is made that the market has become "more efficient."

Nonsense; there was no "real seller" at any of these prices! This pattern of offering was intended to do one and only one thing - manipulate the market by discovering what is supposed to be a hidden piece of information - the other side's limit price!

With normal order queues and flows the person with the limit order would see the offer at $26.20 and might drop his limit. But the computers are so fast that unless you own one of the same speed you have no chance to do this - your order is immediately "raped" at the full limit price! You got screwed, as the fill price is in fact 30 cents a share away from where the market actually is.

A couple of years ago if you entered a limit order for $26.40 with the market at $26.10 odds are excellent that most of your order would have filled down near where the market was when you entered the order - $26.10. Today, odds are excellent that most of your order will fill at $26.39, and the HFT firms will claim this is an "efficient market." The truth is that you got screwed for 29 cents per share which was quite literally stolen by the HFT firms that probed your book before you could detect the activity, determined your maximum price, and then sold to you as close to your maximum price as was possible."

Cheers, Karl, thank you!

Fri, 07/24/2009 - 16:41 | 14467 Woodshedder
Woodshedder's picture

Denninger sends out a ping to ZH, and then tries to frontrun Tyler's posts.

Unfortunately, Denninger is not as good at HFB (high frequency blogging) and therefore his posts always follow Tyler's.

It is definitely NOT because Denninger wouldn't have a thing to write about if ZH didn't write about it first.

Fri, 07/24/2009 - 16:57 | 14496 Anonymous
Anonymous's picture

Buddy, can we keep the personalities out of this and focus on the content? What do you think of Karl's explanation? Seems spot on to me.

Fri, 07/24/2009 - 17:19 | 14522 Woodshedder
Woodshedder's picture

Bingo!!! Hey! Someone gets it! For Karl, its ALL about personality!!!

You did know he wants to be a politician, didn't you?

Fri, 07/24/2009 - 17:25 | 14531 Anonymous
Anonymous's picture

You're very tiresome.

Fri, 07/24/2009 - 16:29 | 14446 jedwards
jedwards's picture

Wow for someone so blonde and hot, she's pretty well-spoken and knows her stuff.

Fri, 07/24/2009 - 16:36 | 14460 Anonymous
Anonymous's picture

If I understand this correctly, the HFT people say they are providing a service by facilitating price discovery and providing liquidity. Can someone explain to a dope like me why such a large percentage of the volume (70%) is necessary to make this happen?

Fri, 07/24/2009 - 16:37 | 14463 Gordon_Gekko
Gordon_Gekko's picture

I'm guessing the issue isn't really HFT per se, but frontrunnig variants of it. I don't see any problem with HFT if there is no frontrunning occurring, provided HFT isn't just a fancy name for frontrunning.

Fri, 07/24/2009 - 16:49 | 14480 Anonymous
Anonymous's picture

one second is all it would take to fix it.. one measly second...

Fri, 07/24/2009 - 17:41 | 14547 Anonymous
Anonymous's picture

Great point We should slow down all Google searches, too, so that advertisers get a "fair" crack as being top of the display. I say, 30 seconds?

To someone who actually knows what is going on here (nothing illegal, perhaps disagreeable, but not illegal) all these comment of "1 second" sounds as ridiculous as making everyone wait 30 seconds for their Google search results.

Fri, 07/24/2009 - 18:24 | 14591 Anonymous
Anonymous's picture

You're making the same squawking noises as that irritant bimbo.

Fri, 07/24/2009 - 18:50 | 14618 Anonymous
Anonymous's picture

The funniest thing about my "squawk" is that it is right.

You might not like the rules, but they are the rules. No one is doing anything illegal. Don't go all Democratic party and equate "morality" with "illegality." Two different concepts, mkay?

Fri, 07/24/2009 - 19:15 | 14643 Anonymous
Anonymous's picture

Please, you're out of your league. Bye.

Fri, 07/24/2009 - 21:36 | 14767 Anonymous
Anonymous's picture

Which league is that? Pee Wee? This blog did not "change the world." Come back when your hallucinations cease.

Tue, 07/28/2009 - 18:14 | 17446 Anonymous
Anonymous's picture

No. Your analogy is worthless.

Fri, 07/24/2009 - 17:05 | 14506 Gwaihir
Gwaihir's picture

Tyler... she cannot send you the book - release date Jan 12th, 2010.

Why are they pumping stuff I cannot buy now?


Fri, 07/24/2009 - 17:11 | 14515 Anonymous
Anonymous's picture

Quick. Before you rob, write a book about how great it is and publish it. That makes it legal.

Fri, 07/24/2009 - 17:14 | 14518 SWRichmond
SWRichmond's picture

This literally means that each and every time I post an order I facilitate this activity, boost Goldman's profits, AND get cheated.


Hell, I know how to protect myself from that.  CASH OUT OF THE FUCKING CROOKED EXCHANGES.  I wonder if there's a local credit union that lends against its deposits locally and that would like some nice IRA money?

Fri, 07/24/2009 - 17:49 | 14557 Anonymous
Anonymous's picture

Sadly the only skill these guys bring to the table is the ability to find a loop whole and exploit it at the cost of diminishing the integrity of the market. You do not even have to be good at math to do what they do, its what in the games industry is called an exploit, and using those exploits gets you banned. But hey thats in video games , and video games are serious business.

Fri, 07/24/2009 - 17:59 | 14565 Anonymous
Anonymous's picture

Good Night IRENE!!

You are in WAYYY over your head need to take some DEBATE 101 courses, because you failed miserably on national television on this topic!!

We are going to route you out like the Den of Vipers you are....ALL of you.

Goldman Sachs----

Automated Front Running on an UNFATHOMABLE SCALE-----

"While the Street is percolating with anger and curiosity about “High Frequency Trading” there is also frustration and astonishment that the media, regulators and our duly elected are not addressing what could be the biggest financial abuse story of our times, if not history..........

MARKETWATCH!!! CNBC!!!! Anyone in the mainstream financial media care to COMMENT??????

Fri, 07/24/2009 - 18:18 | 14586 ghostfaceinvestah
ghostfaceinvestah's picture

That was my take, she seems very naive, running a two-bit fund.



Sat, 07/25/2009 - 02:41 | 14989 Cheeky Bastard
Cheeky Bastard's picture

two-bit bimbo running two-bit fund

Fri, 07/24/2009 - 18:01 | 14568 Anonymous
Anonymous's picture

Irene, you ignorant SLU!# Sticking up for Crooks- your mom and dad must be real proud of ya.

Fri, 07/24/2009 - 18:05 | 14575 Anonymous
Anonymous's picture

Saluzzi makes a good point: volatility is not liquidity. Were we to enforce a rule that required each bid and offer to last AT LEAST ONE SECOND--would this solve the problem? Or would this have unintended negative consequences on the market?

Taking this thought further, what's so special about one second anyway? The speed of light is an upper bound--it would take a maximum of approx 0.13 second for an electron to traverse the circumference of the earth. Half that time would be the maximum theoretical time to traverse the distance from any point to any other point anywhere on the globe's surface.

If this is the case, couldn't we just quantize the market into that number of time segments in a day (about 360,000 segments)? Every BID/ASK order would then be bound and queued to the next quantized time segment. This gives every server on the planet the same access time to data feeds as the co-located servers. Fair playing field for humans and machines, no advantages for server proximity as quantization delivers same data to every server at the same time. In a sentence: a wait state for global markets.


Fri, 07/24/2009 - 18:07 | 14577 Anonymous
Anonymous's picture

That's genius.

Fri, 07/24/2009 - 19:50 | 14669 Anonymous
Anonymous's picture

I agree!

Fri, 07/24/2009 - 18:05 | 14576 Anonymous
Anonymous's picture

LMAO! What a complete ameteur Irene was! Huffing and puffing in the background and making all sorts of facial expressions that I havent seen since Junior Fucking Highschool! Saluzzi ate your lunch babe..

Fri, 07/24/2009 - 18:08 | 14578 Anonymous
Anonymous's picture

Okay-can someone please explain this to me?

If Goldman Sachs is guilty of this sort of Massive scheme, then where are the class action lawsuits from all of their competitors and from individual investors?

Why arent we getting even basic answers from our government?

Fri, 07/24/2009 - 18:35 | 14602 Anonymous
Anonymous's picture

What percentage of individual investors have heard about this (minuscule I'm sure). What individual investor could afford to take on GS?

Who said Goldman Sachs is the only firm doing this?

Fri, 07/24/2009 - 18:38 | 14607 jym
jym's picture

They own the government :)

Fri, 07/24/2009 - 18:58 | 14625 Eagle
Eagle's picture

Oh boy! Irene makes boxes of rocks seem eligible for MIT fellowships.

Fri, 07/24/2009 - 19:21 | 14651 mellmeister
mellmeister's picture

That cute face wasn't made for talking.

Fri, 07/24/2009 - 19:07 | 14633 Anonymous
Anonymous's picture

You know, I have to be glad that CNBC is covering this, so thanks CNBC for that.

If you have any class at all, though, you need to say at the end of one of these segments, "And thanks to the ANONYMOUS BLOGGERS at for covering for this four months before we thought to invite some guests to talk about it, great work, Tyler!"

Is that too much to ask?

Fri, 07/24/2009 - 19:29 | 14658 Anonymous
Anonymous's picture

Irene- I have a book I would like to recommend for you...


Seriously--you got SCHOOLED girlfriend.

Fri, 07/24/2009 - 20:00 | 14677 ghostfaceinvestah
ghostfaceinvestah's picture

In the "enemy of my enemy is my friend" department

Schumer Asks SEC to Ban Flash Orders Used by High-Speed Traders


“Flash orders allow certain members of these exchanges to obtain access to order flow information before that information is made available to the public,” Schumer wrote. That allows “those members to use rapid trading programs to trade ahead of those orders and profit from advanced knowledge of buying and selling activity,” he added.

The senator said that if the SEC doesn’t prohibit flash orders, he will introduce legislation that would.

Fri, 07/24/2009 - 20:42 | 14713 deadhead
deadhead's picture

thanks for the Schumer's interesting to note that the senior NY senator is typically viewed on a historical basis as Wall St.'s guy. 

It's interesting to see Schumer go against the street here (he has a couple of other times as well) as he does play both sides, i.e. the populist politician and then the backroom defender of the street. 

As has been discussed previously, the only way to get the political establishment to move against the goldman sachs of the world is to keep the light on and the pressure high.  Zero Hedge and others are making a huge difference in that the MSM is being forced to cover the issues that are surfacing from the new media world.

Fri, 07/24/2009 - 21:13 | 14743 Anonymous
Anonymous's picture

So the ends justifies the means? The SEC makes the rules, unless a Senator does not like them? I agree with Senator Schumer's proposal but I detest a member of Congress asserting such pressure on an independent body . At least let the SEC study it to get the facts. All this blog has done is hoodwing gullible reporters that are apparently too lazy to find their own stories much less research them into creating an echo chamber on this topic. This blog, the NYT, and the WSJ and Bloomberg are all so far off base on this topic it is ridiculous. HFT has nothing to do whether or not Flash orders should exist. Flash orders do exist, HFT trading styles benefit from them, so they used them. Take away Flash and guess what, HFT will still be here. They were here before. They will be here later. Schumer should let the SEC do their job (countdown to post regarding SEC and Madoff commencing in 3,2,1...)

Fri, 07/24/2009 - 21:45 | 14774 Anonymous
Anonymous's picture

"Turn the machines back on!!!!"

Sat, 07/25/2009 - 00:00 | 14884 deadhead
deadhead's picture

,,,,"but I detest a member of Congress asserting such pressure on an independent body.."


Anon 14743.  Perhaps a basic lesson in American governance would be helpful.  Congress makes laws. The Executive Branch enforces said laws.  I would argue that the SEC is hardly an independent body but more of an arm of the Executive Branch. Even if we put aside the independence issue or "arm of Exec Branch" matter, the fact is that a member of Congress can introduce any legislation that he wants.  If it passes, it is law and the Executive Branch must enforce it.  Any independent body (or individual for that matter) must comply with said law.


I hope this helps.



Sat, 07/25/2009 - 03:34 | 15000 Gwaihir
Gwaihir's picture

Well said. There has been times when subsystems were set-up to control other subsystem, today this is approach is considered inefficient or confusing.

Fri, 07/24/2009 - 20:57 | 14725 Anonymous
Anonymous's picture

Amazingly, the Senator got this right. High speed, co-location, Goldman Sachs, etc. are not the issue and never has been. Flash orders are the issue. Remove the adjectives, eliminate the bias towards "old school Saluzzi style" or "sparc based" trading and you get accurate information. At last. Likely by accident, but at last.

Fri, 07/24/2009 - 21:10 | 14733 Tyler Durden
Tyler Durden's picture

while i agree in principle, i disagree in practice. flash is just a part of it - a big one... once you get discovery from NYSE and some TBTFs, it will get very interesting.

Fri, 07/24/2009 - 21:15 | 14744 Anonymous
Anonymous's picture

Two questions:

Discovery of what?

Do you realize that most Too Big To Fails do not use Flash orders? Most are used by specialized entities that are actually registered broker dealers such as GETCO, Tradebot, ATD, etc.?

Fri, 07/24/2009 - 21:30 | 14759 Anonymous
Anonymous's picture

Do you realize that although you probably believe you know all there is to know on this topic you have no idea how much more there is to know?

If you want to focus on flash orders (which NYSE SLP is, however, it is a horrible product and Larry got angry at that conference because he was losing market share, as the NYSE has been for the last seven years) in name only, then yes, I am wrong. If you want to understand the broader flash order market, read on.

The entities I named all sell their own flash order to sell side institutions. If NYE SLP, BATS BOLT, Direct Edge and CBSX ELP are "private markets" then what GETCO , Tradebot, ATD, Sun Trading, and others offer are friggin' VIP rooms within the private club.

Tyler, Larry at NYSE wants the competition of superior, innovative exchanges curtailed. GETCO, et al want publicly available flash orders offered by exchanges to go away to leave only their private flash orders as the choice for routing such flow.

If you want to really perform a truly value added service to the regular guy, retail customer. Go after payment for order flow. Call Charles Schwab and ask them why they sell their flow to UBS. Call TD Ameritrade and ask why they sell their flow to Citadel. The list could go on. If flash orders are wrong, the payment for order flow is damning.

Fri, 07/24/2009 - 21:34 | 14763 Tyler Durden
Tyler Durden's picture

I appreciate your patronizing tone, it really helps your credibility. If I had followed the advice of everyone who knows much more than I do, I would still be trying to put the first post up on blogspot. As for order flow, it is up there in priority.

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