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Germany Does What The SEC Hasn't - Prepares To Ban HFT

Tyler Durden's picture





 

The EU assembly just voted affirmatively to impose a spate of rules to control 'high-frequency-trading that, as the WSJ reports, was advanced by Germany following their concerns that speedy traders have brought instability to markets. It is somehow reassuring that three-years after we first brought HFT to the mainstream's agenda, at least one nation is taking it seriously, doing something about it, instead of being filibustered into the 'liquidity-providing' meme. The rules will initially require registration, collect fees on excessive use of HFT methods, and install circuit breakers with the goals to "limit the risks associated with high-frequency trading" per a senior German FinMin; but the more stringent rules to come will have the greatest impact as they intend to include requirements for orders to rest on the exchange book for at least half-a-second, and potentially order-to-trade ratio caps. Not surprisingly, the HFTs believe a "one-size-fits-all approach would be very harmful." Indeed - to their profits.


Via WSJ: Germany to Tap Brakes On High-Speed Trading

BERLIN—Germany is set to advance a bill Wednesday imposing a spate of new rules on high-frequency trading, escalating Europe's sweeping response to concerns that speedy traders have brought instability to the markets.

 

The measure seeks to require traders to register with Germany's Federal Financial Supervisory Authority, collect fees from those who use high-speed trading systems excessively, and force stock markets to install circuit breakers that can interrupt trading if a problem is detected.

 

...

 

"The goal of the German law is to limit the risks associated with high-frequency trading," he said.

 

Germany's push comes as regulators and investors on three continents fret over the recent dominance of high-frequency traders, which often profit from paper-thin differences in stock and derivatives prices, and the role their computer programs may have played in some of the market's most frantic moments since the financial crisis.

 

In May 2010, in the so-called flash crash, the Dow Jones Industrial Average plunged 1,000 points before recovering most of its losses within hours. The exact causes of the selloff are disputed.

 

More recently, Knight Capital Group Inc. KCG +5.21% lost $440 million in a computer trading glitch...

 

... Germany hopes its bill will put pressure on other European leaders to support EU-wide regulation for high-frequency trading.

 

... establish the Parliament's position on a number of stringent new rules, including "speed bumps" for high-frequency trading.

 

These include the requirement for orders to rest on the exchange order book for a minimum of half a second—an eternity for firms accustomed to trading in millionths of a second—before they can be canceled or modified, and penalties for high cancellation rates.

 

On Aug. 1, France introduced a high-frequency trading tax as one of the three levies that comprise its financial-transaction-tax package.

 

In the U.S., regulators have struggled to get a grip on the issue. The Commodity Futures Trading Commission this year formed a group to define high-frequency trading in order to better track it, while the Securities and Exchange Commission has announced plans to build a "consolidated audit trail" that can monitor frenetic trading activity.

 

The SEC also is investigating whether some high-speed firms use special advantages provided by exchanges to gain an edge over ordinary investors, according to people familiar with the matter.

 

...

Industry advocates caution against regulations that could hamper the ability of traders to react quickly to market shifts and manage their risks.

 

Imposing caps on the number of trades or instituting order-to-trade ratios, as proposed in the German bill, could restrict traders from being able to revise their quotes, the price at which they buy or sell stocks, based on new information, they say.

 

...

 

"We think a one-size-fits-all approach would be very harmful," warns Remco Lenterman, chairman of the FIA European Principal Traders Association, which represents firms that trade their own capital.

 


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Wed, 09/26/2012 - 11:31 | Link to Comment LongSoupLine
LongSoupLine's picture

Fuck yeah!!

 

Ich liebe Germany!

Wed, 09/26/2012 - 11:40 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

"I felt a great disturbance in the Farce, as if millions of algos suddenly cried out in terror and were suddenly silenced. I fear something terrible has happened."

 

-Darth Faucon

Wed, 09/26/2012 - 11:45 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Next thing you know they're gonna put a speed limit on the Autobahn.

 

Not a bad idea considering all the drunks on the road.

 

Wed, 09/26/2012 - 11:59 | Link to Comment Dr. Engali
Dr. Engali's picture

I wish I could drive on a road like the Autobahn...the land is so flat in corn country you could drive for an hour before you hit any congestion. The problem here isn't other cars on the road ,it's that . the roads are so shitty 

Wed, 09/26/2012 - 13:07 | Link to Comment exi1ed0ne
exi1ed0ne's picture

I've driven in Germany, and the most welcome (as well as somewhat terrifying) sight is this:

http://www.autobahnbound.com/wp-content/uploads/2009/06/autobahn-end-of-...

The no restrictions sign.  You find them not just on highways, but also country roads.  It is a great feeling not having the nanny state breathing so heavily on you, but all the accidents I've seen were fatal.  Choice and responsibility in balance.

Wed, 09/26/2012 - 14:00 | Link to Comment bvrulez
bvrulez's picture

the no restriction sign on coutry roads means 100 km/h maximum. which is still more than in your country, but obviously a restriction. :)

Wed, 09/26/2012 - 14:28 | Link to Comment aerojet
aerojet's picture

We have plenty of fatalities in the states even with speed limits.  And btw, since Germany invented most of the practices we related to Big Brother, I don't see how them having no speed limits in a few places is exactly a breath of fresh air.  A friend of mine who was visiting Germany received a ticket for not wearing his seat belt while sitting in a parked car!  I noticed when I was there that people are very, very law abiding, as in, they won't even jaywalk--that doesn't come from the state not leaning hard on people. 

Wed, 09/26/2012 - 20:22 | Link to Comment Bunga Bunga
Bunga Bunga's picture

I noticed when I was there that people are very, very law abiding, as in, they won't even jaywalk

This depends very much on the region.

Speed limits in the US make sense, since speeds above 70 mph are close to suicide. Going at 100 mph in Germany feels like 50 mph in the US. And if you drive 100 mph on the Autobahn, don't use the left lane, because it is reserved for the fast cars.

Wed, 09/26/2012 - 11:59 | Link to Comment LawsofPhysics
LawsofPhysics's picture

But what about the liquidity? These paper-pushers stink of fear.  Bring it.

Wed, 09/26/2012 - 16:36 | Link to Comment Dr Benway
Dr Benway's picture

Yeah the humanity! How will we live without the 'liquidity' provided by HFTs putting up orders for a single share lasting one microsecond?

SOL is a multibillion dollar Australian listed company. The most common trade in this stock is for one share at 13 bucks. On the 29/6 at 15:58, the SOL share price was ramped 3% by an algo trading five shares. Check out my slideshow on Australian securities fraud:

http://s1144.photobucket.com/albums/o489/_DrBenway/

Wed, 09/26/2012 - 12:35 | Link to Comment Cash2Riches
Cash2Riches's picture

Wow this will be a huge step if they go ahead with it. HFT is a plague on the markets.

 

http://silverliberationarmy.blogspot.ca/

Wed, 09/26/2012 - 13:18 | Link to Comment exi1ed0ne
exi1ed0ne's picture

Don't worry, the legislatiors will get the warning about pissing in the pool:

http://www.zerohedge.com/news/2012-09-26/europe-goes-pear-shaped

Wed, 09/26/2012 - 13:26 | Link to Comment Mountainview
Mountainview's picture

But Germany fighting HFT alone...LOL...

Wed, 09/26/2012 - 13:52 | Link to Comment DeadFred
DeadFred's picture

What we have here is a failure to communicate (by way of campaign contributions). The HFTs can easily solve this.

Wed, 09/26/2012 - 11:32 | Link to Comment Lost Wages
Lost Wages's picture

Anti-Nuclear-Power and now Anti-HFT? These krauts are after my own heart.

Wed, 09/26/2012 - 12:02 | Link to Comment JustObserving
JustObserving's picture

Looking out for the little guy - what a novel idea.  In the land of the free, we have complete regulatory capture.

Wed, 09/26/2012 - 11:33 | Link to Comment Slope of Hope
Slope of Hope's picture

Cue the HFT whores on CNBC.

Wed, 09/26/2012 - 11:49 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Paging Maria......please pick up the white courtesy phone...pronto!

Wed, 09/26/2012 - 11:34 | Link to Comment Cunnial
Cunnial's picture

FUCK HFT... Long Live Retail! 

Wed, 09/26/2012 - 11:50 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Dude....I get all my crap at Sam's Club.

 

This is not an endorsement until they pay me.....then it is.

 

Wed, 09/26/2012 - 11:35 | Link to Comment Temporalist
Temporalist's picture

HFT provides the liquidity of the wealthy and connected pissing down the backs of everyday people.

Wed, 09/26/2012 - 11:35 | Link to Comment Captain Planet
Captain Planet's picture

Where's the Athens riot-cam, Tyler?

Wed, 09/26/2012 - 11:36 | Link to Comment Confundido
Confundido's picture

Fucking bastards! They won't do shit to fix the problem. They will just tax the other sons of bitches, so they can share in the fucking revenue.

What needs to be done is to force exchanges to allow investors to tick on/off the option: "Do you want to route this order through an HFT infested platform or not? A higher trade fee may be applicable if you choose not to, but we guarantee your order will not be frontrun"

Wed, 09/26/2012 - 14:30 | Link to Comment aerojet
aerojet's picture

That would be just fine.  Also what would be fine is to assess a fee for each transaction even if it gets pulled before a fill so as to avoid all the denial of service, or excuse me, bid stuffing, that takes place. 

Wed, 09/26/2012 - 11:37 | Link to Comment Dr. Engali
Dr. Engali's picture

The bankers better hurry up and buy some people off so they can squash that clearly destructive bill.

Wed, 09/26/2012 - 14:30 | Link to Comment hidingfromhelis
hidingfromhelis's picture

If that and the imminent sanctions don't work, when do we start bombing them?

Wed, 09/26/2012 - 11:40 | Link to Comment walküre
walküre's picture

The End

Director .......... Financial Markets

Main Actor ........ Mario Draghi

Sponsored by the German Taxpayer

 

Handelsblatt declaring the "end of the Euro crisis".

LOL! Ze Germanz are declaring the Endsieg! You all know what comes next.

I really hope for their sake that it's satire.

Wed, 09/26/2012 - 11:38 | Link to Comment FL_Conservative
FL_Conservative's picture

Mary Schapiro, the ignorant and useless current chair"person" of the SEC doesn't think that HFT puts the average investor at a disadvantage.  Heard those exact words from Schapiro on an AP news report Monday evening while I was driving.  Almost drove into the ditch, I was so fucking beside myself.  That is why NOTHING will ever be done by her.

Wed, 09/26/2012 - 12:02 | Link to Comment jeff314
jeff314's picture

dont forget she's a JEW....

Wed, 09/26/2012 - 12:32 | Link to Comment FL_Conservative
FL_Conservative's picture

The only thing one needs to know is that she is COMPLICIT.

Wed, 09/26/2012 - 12:45 | Link to Comment SMG
SMG's picture

She's an Luciferian Oligarch puppet, and the Oligarchs are NOT Jewish.

Wed, 09/26/2012 - 12:16 | Link to Comment JustObserving
JustObserving's picture

Her parting gift from FINRA may explain her views:

Some people think it's a good idea for regulatory officials to receive pay like the Wall Streeters they're supposed to reign in.

Turns out at least one of them already has - Mary Schapiro, who's now the head of the SEC.

In 2008, FINRA paid Schapiro almost $9 million ($8,985,334.02 to be exact).


http://articles.businessinsider.com/2010-10-11/wall_street/29989801_1_finra-board-million-gift-incentive-compensation#ixzz27apWsyUN

 

Wed, 09/26/2012 - 12:27 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

 

 

In 2008, FINRA paid Schapiro almost $9 million ($8,985,334.02 to be exact).

flag as a sign of the apocolypse (1)

Wed, 09/26/2012 - 11:37 | Link to Comment Quinvarius
Quinvarius's picture

CFTC and SEC humilated again.

Wed, 09/26/2012 - 11:46 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

 

It's OK......they don't really seem to mind.

 

Wed, 09/26/2012 - 13:13 | Link to Comment exi1ed0ne
exi1ed0ne's picture

Pvt. Joe Bowers: Why me? Every time Metsler says, "Lead, follow, or get out of the way," I get out of the way.
Sgt. Keller: Yeah, when he says that, you're not supposed to choose "get out of the way." It's supposed to embarrass you into leading - or at least following.
Pvt. Joe Bowers: That doesn't embarrass me.

Wed, 09/26/2012 - 11:39 | Link to Comment GoodMorningMr.V...
GoodMorningMr.VanRumpoy...'s picture

War on machines?

Wed, 09/26/2012 - 11:39 | Link to Comment max2205
max2205's picture

Duh. Thanks GERMANY. I hope you throw HFT in the trash where it belongs

Wed, 09/26/2012 - 11:54 | Link to Comment Mercury
Mercury's picture

How is that going to work exactly with German names listed on multiple exchanges?

Sounds potentially arbilicious...

Wed, 09/26/2012 - 12:17 | Link to Comment Cthonic
Cthonic's picture

That is the dilemna. One could add legal boilerplate to a security issuance which limited registering and listing of the security to a single exchange.

Wed, 09/26/2012 - 11:40 | Link to Comment Meesohaawnee
Meesohaawnee's picture

look at the euro/russian market. at least if you look at the charts thats what a real market should look like

Wed, 09/26/2012 - 11:42 | Link to Comment ThisIsBob
ThisIsBob's picture

A whole half second?  Golly!

Wed, 09/26/2012 - 11:45 | Link to Comment Comay Mierda
Comay Mierda's picture

that is an eternity for HFTs

dont worry though, gOldman NutSachs will be bribing all German regulators in 3... 2... 1...

Wed, 09/26/2012 - 12:42 | Link to Comment SpykerSpeed
SpykerSpeed's picture

Agreed, WHAT IF THE FUNDAMENTALS CHANGE 1/4 SECOND AFTER I BUY??  Ugh.  *snorts coke*

Wed, 09/26/2012 - 13:30 | Link to Comment OneTinSoldier66
OneTinSoldier66's picture

"A whole half second?  Golly!"

 

I thought the same thing at first. But there's more to it than that...

 

'...at a minimum'

Wed, 09/26/2012 - 11:41 | Link to Comment q99x2
q99x2's picture

SEC can't. The exchanges just spent billions filling the floors below with super cooled artificial intelligence beowulf parallel processing computers with fiber trunk lines upstairs to siphon the beejesus out of the markets. What are they susposed to do call wrecking and hauling because of some low paid bureaucrats? Hell no they will bribe the SEC and maybe this time with bitcoin.

Wed, 09/26/2012 - 12:25 | Link to Comment Nobody For President
Nobody For President's picture

call wrecking and hauling?

What a wonderful idea!

Bring back carbon-based trading!

(I soppose that makes me a luddite.)

Wed, 09/26/2012 - 12:30 | Link to Comment ThisIsBob
ThisIsBob's picture

Just wait a minute...  I the quest for fairness in the markets, the exchanges assure that all co-located machines have the same length cable. 

Wed, 09/26/2012 - 11:42 | Link to Comment Sutton
Sutton's picture

The floor traders will have jobs again.

Wed, 09/26/2012 - 11:45 | Link to Comment lailapa
lailapa's picture

GERMANY, the DISGRACE of Europe

...the barbarians, who forced beautiful Europe to get down Zeus’ “back” and made her a prostitute.

...the unworthy Europeans, who in 1945 “took Europe down” from “Mount Olympus” and in 2012 relinquished “enslaved” Europe to the Phoenician loan sharks.

http://eamb-ydrohoos.blogspot.gr/2012/02/germany-disgrace-of-europe.html

.

Authored by PANAGIOTIS TRAIANOU

Wed, 09/26/2012 - 11:48 | Link to Comment walküre
walküre's picture

Whatever. The Greeks or anyone else wouldn't give two shits about Europe, EU or Euro if there wasn't any money involved.

A unified Europe always was and always will be a pipe dream.

So, Panagiotis Traianou stick that in your pipe and smoke it. I love your beaches and your goat cheese. I don't like paying 100x the going rate for it though. I come back with lots of hard cash when you have the Drachma and I can buy an island.

Wed, 09/26/2012 - 12:24 | Link to Comment albanian
albanian's picture

what you ecspect from a Grekkk

Wed, 09/26/2012 - 11:49 | Link to Comment TideFighter
TideFighter's picture

BTW, what's going on over at Waddell & Reed...nevermind.

Wed, 09/26/2012 - 11:50 | Link to Comment kevinearick
kevinearick's picture

Unintended consequences

Wed, 09/26/2012 - 11:52 | Link to Comment Village Smithy
Village Smithy's picture

Maybe Trade Station will start providing access to the DAX.

Wed, 09/26/2012 - 11:52 | Link to Comment Kaiser Sousa
Kaiser Sousa's picture

FUCK YOU GARY GENSLER...

FUCK YOU BART SHITOLN....

FUCK YOU MARY "IM A BANKER OWNED WHORE" SHAPIRO....

FUCK YOU BEN COCKSUCKER BERNANKE....

 

that is all....

Wed, 09/26/2012 - 11:55 | Link to Comment Rainman
Rainman's picture

Imagine what volumes will look like without the HFT leeches layering and spoofing all day. It'll be like the old Maytag repairman commercial....the guy sitting there waiting for the phone to ring.

Wed, 09/26/2012 - 11:57 | Link to Comment walküre
walküre's picture

Don't forget, the old Maytag repairman was able to pay his bills and make a living.

Good 'ole times ...

Wed, 09/26/2012 - 12:39 | Link to Comment grgy
grgy's picture

@walkure

Maytag went broke and finally sold out to Whirlpool.  Very consistent with other iconic american companies - a failure to maintain quality and dependability and intense competition sealed their fate.  Sad really. My old Maytags worked for 20 years with very little problem. I'd still have them if I hadn't sold my house.

Wed, 09/26/2012 - 13:22 | Link to Comment walküre
walküre's picture

Appliances "made in China" last 5 years - max

After 3 years the first troubles appear. Friend of mine is appliance specialist. He says buy "made in Germany" or "made in Korea" because you can't find "made in America" anymore.

Wed, 09/26/2012 - 14:35 | Link to Comment aerojet
aerojet's picture

They moved the manufacturing to China and re-branded it "Mayfail."

Wed, 09/26/2012 - 12:13 | Link to Comment LawsofPhysics
LawsofPhysics's picture

The PDs and the Fed will still be calling.

Wed, 09/26/2012 - 12:34 | Link to Comment ThisIsBob
ThisIsBob's picture

Old joke:  Phone rings on the lumber desk.  Both traders break out laughing.

Wed, 09/26/2012 - 11:55 | Link to Comment no life
no life's picture

It will have to wait until after the re-election.

Wed, 09/26/2012 - 11:59 | Link to Comment muppet_master
muppet_master's picture

SHUT THEM ALL DOWN (HFT)

THEN...when the casino keeps deflating...the muppets won't have anyone else to blame !!! LOL !!! shut them down !!!!

This snail trader called the TOP 1 day after QE3 (on Fri) at spx 1475, eur 1.315...oil @ $99, gold @ 1760 (ok top was 1775)

now spx @ 1445 or so, eur @ 1.285, gold @ 1750 or so.....soooooooo much for the HFT...been riding witchez!!!

u can blame the HFT or you can blame the casino managers and their abetters (QEorganizer)

correction:  spx @ 1435..not 1440...was 1431 earlier today..see this is bc i don't "monitor" the casino every hour or every day..just RIDE BABY RIDE.

Wed, 09/26/2012 - 12:00 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Stop already, there is no "market".

Wed, 09/26/2012 - 15:23 | Link to Comment resurger
resurger's picture

You like riding?

Wed, 09/26/2012 - 11:58 | Link to Comment cdskiller
cdskiller's picture

What is Ron Paul's position regarding regulating HFT's?

Wed, 09/26/2012 - 12:01 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Whatever it is....you can be sure it's right.

 

Wed, 09/26/2012 - 12:08 | Link to Comment cdskiller
cdskiller's picture

But, he doesn't believe in regulations, right? I'm just asking.

Wed, 09/26/2012 - 12:31 | Link to Comment Temporalist
Temporalist's picture

Ron Paul doesn't believe in regulation is a ridiculous statement.  He is not in favor of wild west shootouts in the streets just because he's pro second amendment and he's not for completely unregulated wild west wall st either. 

His policy is that over-regulating suppresses free trade especially when it's lobbyists that pass the regulations through the auction house that is government and legislation on behalf of their corporate/banking interests.  Also he states that often there is enough regulation and the regulators don't do their jobs like SEC, CFTC, FINRA were supposed to (see Bernie Madoff, AIG, Enron, etc) so there is no point in adding more stifling regulation; it benefits the biggest and wealthiest corporations that can hire the most lawyers and lobbyists to subvert or circumvent the intent of the regulation anyway while punishing the smallest companies that have a difficult time competing or even entering markets because of the massive barriers to entry and participation.

As far as HFT I'm sure if it was a new "tool" so to speak and it was unproven he'd probably say why not.  But since it is proven that it does little to provide actual liquidity and only is used to make money without purpose or actual use and flow in the economy enriching very few to the detriment of the many I'd have to think he'd say it was utter shit (those are my words).

Wed, 09/26/2012 - 12:51 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

I don't think the problem here is "that HFT is used as a tool" but "that HFT is used as a tool to trade your money and you have no possible knowledge or choice about any of it." 

If you have a broker, you get on the phone and talk to the broker, and say "what did you buy for me today."  And then you say, "I want this" or "I want that". 

With HFT, and the implicit ephemeral trading across the universe, dollars of yours find their ways into the most unsuspecting places ... opium laundering funds, porn sites, etc ... and you have nothing to do with it.

IMO, the great issue at the heart of HFT is an ownership one.  You either own your money to the infinity decimal place or you don't.

Wed, 09/26/2012 - 15:22 | Link to Comment Papasmurf
Papasmurf's picture

HFT is a burglary tool, plain and simple. 

Wed, 09/26/2012 - 13:49 | Link to Comment OneTinSoldier66
OneTinSoldier66's picture

"But, he doesn't believe in regulations, right? I'm just asking."

 

He believes in the strictest regulation of all... the free market.

 

But in the USSA very few people understand the free market as they've never seen or experienced such a thing. To have a free market, the market can't be hidden behind "machines" that are put there in order to 'game' the system. That's cheating and is not part of a free market.

 

He believes that if you are representing your product or service in a fraudulent manner, or just outright stealing gold (by skimming off the top or what have you), that you should be prosecuted.

 

Now, where's Jon Corzine!?

Wed, 09/26/2012 - 14:40 | Link to Comment aerojet
aerojet's picture

That's the problem, though--cheating very certainly is part of the free market.  It's anything goes, no holds barred.  That's why we have HFT to begin with--because there is no regulatory apparatus doing anything to prevent abuse.  There is no higher authority that isn't bought.  HFT is a ridiculous hack of the electronic systems that make up modern trading exchanges.  That's all it is--some guys noticed "hey, we can do this and get this outcome" and it was game on ever after.  It has nothing at all to do with the operation of stable markets, price discovery, or anything.

Wed, 09/26/2012 - 12:02 | Link to Comment Rainman
Rainman's picture

he probably thinks HFT is a venereal disease

Wed, 09/26/2012 - 12:34 | Link to Comment ebworthen
ebworthen's picture

HFT = Human Fucking Terminators

Wed, 09/26/2012 - 11:59 | Link to Comment Hobbleknee
Hobbleknee's picture

I can't believe you guys are falling for the headline.  They're just "collecting fees" and installing "circuit breakers".  In other words, the government wants their share and they want a control mechanism so none of their own inside deals go sour.

Wed, 09/26/2012 - 12:01 | Link to Comment fuu
fuu's picture

Is that Defcon?

Wed, 09/26/2012 - 12:33 | Link to Comment Hobbleknee
Hobbleknee's picture

looks like it

Wed, 09/26/2012 - 12:01 | Link to Comment pndr4495
pndr4495's picture

The SEC and the CFTC should talk to former floor brokers / traders to hear how they believe their careers were hijacked at the hands of the highwaymen , by definition one never sees a successful ambush.

Wed, 09/26/2012 - 12:10 | Link to Comment Ketsa
Ketsa's picture

Half a second is still way too fast...

Wed, 09/26/2012 - 12:15 | Link to Comment Dead Canary
Wed, 09/26/2012 - 12:32 | Link to Comment ebworthen
ebworthen's picture

"...requirements for orders to rest on the exchange book for at least half-a-second..."

Let's go for ten seconds, or 88 seconds - reduce it to human terms rather than Skynet terms.

Wed, 09/26/2012 - 12:35 | Link to Comment FiatFapper
FiatFapper's picture

What if this logic was taken to the extreme and trades had to left open for a 24 hour period.

Wed, 09/26/2012 - 12:37 | Link to Comment supermaxedout
supermaxedout's picture

HFT is the crucial point. It will never be abolished in the US and in the places under the control of the US. Simply because markets are controlled and rigged by fraudulent HFT.

The fastest and the most powerful HFT machine are owned by the market makers which get instructions from Geithner and/or the FED. HFT is a very strong power tool for Washington and London. But soon its gone.  No more manipulation in big style and in the cheap way possible. HFT banks going to loose billions and stock markets are going to find a balance.

Huh thats hard stuff to swallow.  Naked short selling becomes difficult.  Since the naked selling has to be delivered. No more hiding possible. The deals have to be done if one wants to move the price of an asset. No immediate withdrawal possible. Now the counterparts can ask for delivery.

The last nail is the tax on each transaction. Even its very small it adds up, eating the profits and suddenly HFT is a thing of the past.

 

 

Wed, 09/26/2012 - 12:44 | Link to Comment Toonces
Toonces's picture

HFT may be bad, but aren't they really just slitting their own throats in the name of "what's right"? If the US SEC isn't going to do anything, aren't they just limiting their profits artificially?

Wed, 09/26/2012 - 12:44 | Link to Comment VonSalza
VonSalza's picture

Cue 3, 2, 1 we have lift off for first offshore HFT satelite

Wed, 09/26/2012 - 13:01 | Link to Comment beauxe
beauxe's picture

Manipulation by "false" orders should be banned completely.  However, overbearing rules seriously create a high probability of a liquidity black hole.  There is no meaningful floor system in place and it would be naïve to assume that price takers alone will create the continuous liquidity we are accustomed to.

 

Be caeful what you ask for.

Wed, 09/26/2012 - 16:21 | Link to Comment Dr Benway
Dr Benway's picture

The liquidity that HFT provides is false. If a share doesn't have real liquidity it is better to know this rather than be fooled by false liquidity.

Wed, 09/26/2012 - 13:05 | Link to Comment babylon15
babylon15's picture

Like everything else, there will be unintended consequences to this.  Reg NMS had good intentions written all over it, and ultimately turned out to be an awful thing.

Wed, 09/26/2012 - 13:08 | Link to Comment Byte Me
Byte Me's picture

Germany just wants the Trades to run on time...

Wed, 09/26/2012 - 13:28 | Link to Comment larz
larz's picture

too bad the retail horse has left the barn - four more years - go mitt - go congress - yay

Wed, 09/26/2012 - 13:53 | Link to Comment insanelysane
insanelysane's picture

All we want is a $1 for every order submitted via HFT.  Note: Submitted orders, not executed orders.  Then order away.

Wed, 09/26/2012 - 14:01 | Link to Comment Joebloinvestor
Joebloinvestor's picture

They were the first with air bags.

The SEC and FINRA are inept and corrupt.

 

Wait for some lame excuse from both as to why the German "fix" can't be done in the US.

Wed, 09/26/2012 - 14:06 | Link to Comment falak pema
falak pema's picture

the way to go; name a financial EUro zone czar and ban all naked derivative plays, nationalise de facto all TBTF banks, get them to open ALL ther books, wash out the shadow banking crap, spin off the retail, mutual and pension fund activites, fukk the investment type to deep meat, ram it out of the system and hollow out their shit pile up by netting out and writing off their intra-bank interest and CDS type crap. Make all OTC deals transparent and legislate with total exposure of past shenanigans required.

Game over bankstas, prosecute, and let loose the hounds of hell on their backs. 

If their intrabanks plays involve counterparty in US side; get FED to do likewise. Writte off that derivative play to zilch. Clean out the ponzi in the USA.

 

Wed, 09/26/2012 - 15:27 | Link to Comment helping_friendl...
helping_friendly_book's picture

If they just outlawed RePurchase Agreements (REPO) the market would sort itself out.

If there was no REPO the banks couldn't cook the books and would have to claim bankruptcy. 

Wed, 09/26/2012 - 15:20 | Link to Comment Scalaris
Scalaris's picture

'bout fucking time.

I've had it with these goddamned bots, frontrunning my penny shares to kingdom fuck. 

Wed, 09/26/2012 - 15:31 | Link to Comment fiddy pence haf...
fiddy pence haff pound's picture

WHAT WAS THAT?

DID YOU SEE IT?

A .0001 OF A SECOND FLASH CRASH OF GERMAN BUNDS

HERE. WATCH IT AGAIN.

FOOM

THAT'LL SHOW YA. PESKY GERMANS.

JUST MADE A MILLION ON THAT. 

SIGNED -DALLEK 3000 BANKING COMPUTER

computers are in charge, bichez. Except in Norway.

Wed, 09/26/2012 - 15:37 | Link to Comment resurger
resurger's picture

We usually use the Microwaves to make pop corn, how the fuck they use it to make money?!

I smell a conspiracy theory here O_0

Wed, 09/26/2012 - 15:57 | Link to Comment dadichris
dadichris's picture

HFT is to the market as Meth is to humans.

Thu, 09/27/2012 - 08:18 | Link to Comment Widowmaker
Widowmaker's picture

Germany is absolutely right - market instability and crooked markets.

Only schnitzel fuckers and Bailouts Inc are in equities.

Fuck the Fed.  Ben will have a hard life after his "chairmanship."  You aint shit without it Ben.

 

Thu, 09/27/2012 - 11:24 | Link to Comment monad
monad's picture

This is good? Now Merkel's schnitzel gagging boy toys will have exclusive HFT rights in Germany, setting a precedent for the rest of the international criminal syndicate qua government.

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