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BATS Admits CEO Lied About HFT On CNBC

Tyler Durden's picture




 

It is now quite clear why BATS CEO Bill O'Brien was so agitated during the Tuesday's screamfest on CNBC. As The Wall Street Journal's Scott Patterson reports, under pressure from the NYAG, BATS has hurriedly issued a statement correcting the CEO's false comments during the exchange with IEX's Brad Katsuyama. After Katsuyama said "you wanna do this, let's do this" clearly giving him an out, O'Brien stated that BATS priced its trades off 'high-speed' data feeds when in fact they price their trades off a much slower feed (and therefore 'enable' the exact HFT-front-running that is in question).

Here is the clip in particular where O'Brien lies following Katsuyama's question... that BATS uses the high-speed feed to price its trades...

The exchange in question...

What do you use to price trades in your matching engine on Direct Edge?” Mr. Katsuyama asked Mr. O’Brien.

 

“We use the direct feeds,” Mr. O’Brien said.

 

Mr. Katsuyama, whose IEX dark pool markets itself as a haven for investors against high-speed traders, later brought up the issue again. “You use the SIP to price trades on Direct Edge,” he said.

 

“That is not true,” Mr. O’Brien said.

 

 

But as The Wall Street Journal reports, it was true

BATS Global Markets Inc., under pressure from the New York Attorney General’s office, corrected statements made by a senior executive during a televised interview this week about how its exchanges work.

 

BATS President William O’Brien, during a CNBC interview Tuesday, said BATS’s Direct Edge exchanges use high-speed data feeds to price stock trades. Thursday, the exchange operator said two of its exchanges, EDGA and EGX, use a slower feed, known as the Securities Information Processor, to price trades.

 

The distinction matters because high-speed traders can use powerful computers and superfast links between markets to outpace traders and trading venues that rely on slower market data, such as the SIP.

 

Full BATS Statement below:

Clarification Regarding Market Data Usage

 

April 03, 2014

 

BATS Global Markets wishes to clarify the market data usage of its exchanges. With respect to routing, EDGA & EDGX use direct depth-of-book data feeds for all major exchanges, and data from the relevant securities information processor (SIP) for certain smaller exchanges. With respect to the matching engine, EDGA & EDGX currently use the SIP, but will be transitioning to direct feeds from all major exchanges in January 2015. BATS BZX and BYX exchanges currently use direct feeds for both routing and its matching engine from all major exchanges, and SIP data from certain smaller exchanges.

Apparently the NYAG decided to make a public spectacle and to force O'Brien to shame himself (in a very low frequency fashion) publicly on Twitter:

And here is Nanex with the clearest example of just what the difference between the 'slow' consolidated SIP feed (that BATS CEO lied about using) and fast 'Direct' feed (that BATS actually uses enabling HFT to skim as seen below) means...

The trade time-stamps in the consolidated feed are not the original time-stamps shown in expensive direct feeds used by High Frequency Traders (HFT). The time-stamps are getting replaced right before they are transmitted to subscribers from the SIP (security information processor, which creates the consolidated feed). This means direct feed subscribers are getting more accurate core market data than consolidated subscribers: a direct Reg NMS violation.

 

 

The loss of original time-stamps makes it difficult to reconstruct accurate audit trails or make comparisons to quote data. It also renders any computations based on trade data (e.g. charts, technical analysis) inaccurate.

 

We matched a few seconds of SPY trades on June 3, 2013 from a direct feed (Edge-X) to the same trades from the consolidated feed. In the selection shown in the image on the right, the first trade (163.21 and 400 shares) has a time-stamp of 10:00:00.013 in the direct feed and a time-stamp of 10:00:00.243 in the consolidated feed, a difference of 230 milliseconds!

 

Download the complete list (pdf).

 

See this paper for more charts and data on this event.

Ironic that the two versions of the same reality are "blue" and "red" in this chart... which pill will you swallow?

This leaves us with two possibilities, either:

1) The CEO of BATS has no idea what his firm actually does and is merely happy to earn an impressive amount of money skimming off the rest of the population of market traders no questions asked, or

 

2) The CEO of BATS is a liar and is merely happy to earn an impressive amount of money skimming off the rest of the population of market traders no questions asked.

 

 

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Thu, 04/03/2014 - 19:40 | 4623227 holdbuysell
holdbuysell's picture

That's it, I'm selling my position in BATS...oh wait!

Thu, 04/03/2014 - 19:43 | 4623243 0b1knob
0b1knob's picture

BATS HFT crazy....

Thu, 04/03/2014 - 19:56 | 4623290 X_mloclaM
X_mloclaM's picture

"yer quoted ... hmgmgmhgm"

Thu, 04/03/2014 - 20:09 | 4623323 philipat
philipat's picture

So, let me see I understand this correctly. Goldman now wants to end HFT front-running so that it can route more (All?) trades through IEX so that it can return to a dominant position in front-running client trades?

Thu, 04/03/2014 - 20:23 | 4623369 Algosaurus Rex
Algosaurus Rex's picture

I'd like to take some BATS to little Billy O'Brien's head. Just another psychopathic liar...

Thu, 04/03/2014 - 20:24 | 4623380 synergize
synergize's picture

I'll take a little of option #1 and a little of option #2... a liar that doesnt know his own business

Thu, 04/03/2014 - 20:36 | 4623423 ebworthen
ebworthen's picture

Ditto.  Bet Bob Pisani forgets this admission and never mentions it.

Weasels and wastrals instead of Men.

Fri, 04/04/2014 - 01:05 | 4623942 Say What Again
Say What Again's picture

I think the solution for most of this is really very simple. 

First, no order can be cancelled until 0.5 seconds have transpired.  In other words, EVERY order has to live for at least 0.5 seconds. That's NOTHING to a human, but its an eternity to an HFT robot.  Think back to the days of floor trading, or trading in the pit.  If I made a hand gesture, and someone responded, I couldn't go back and say; "just kidding"  -- "I want a do-over"

Second, The exchange should be required to post the BID or ASK on the SIP BEFORE the Liquidity Provider, or anyone else "inside" the exchange, gets to see the order.  Again, this would slow down the execution by about 0.5 seconds, but a human would be OK with that, if they knew that promoted "fairness".

Third, No "Flash Orders"  Repeal the exception to Rule 602 of Regulation NMS.  A "Flash Order" is an order that has been sent to a "Liquidity Provider" to see if they want to take the other side of the order. The LP has about 300 milliseconds to decide if they want to take the other side of the order.  THIS IS BULLSHIT! They say that Flash Orders were prohibited in 2009, but I'm not so sure.

https://www.sec.gov/news/press/2009/2009-201.htm

These three changes would neutralize 99% of the HFT advantages.  It really is that simple.

 

http://en.wikipedia.org/wiki/Flash_trading

http://www.investopedia.com/terms/f/flash-trading.asp

 

Oh -- Here is one more little "gem" from the BATS of old

http://cdn.batstrading.com/resources/comment_letters/BATS_Exchange_CL_11...

They were laughing all the way to the bank.

Fri, 04/04/2014 - 01:06 | 4623950 toys for tits
toys for tits's picture

I say let them stay in business and let the marketplace of ideas sort it out.  

IEX will become the exchange of choice that way and no additional regulation needed.

I hear O'brien is looking to buy a nail gun at the local pawn shop.

Fri, 04/04/2014 - 01:10 | 4623956 Say What Again
Say What Again's picture

I agree with *some* of what you are saying.

I hope that IEX will draw enough real trade activity, that it makes the other exchanges take notice.  However, I still think that change to rules governing internal market behavior is absolutely needed.  Just consider "pay for order flow."  If TD-Ameriscalp is paid to route their orders to the BATS exchange, they are not going to re-route their orders to IEX, just to be altruistic.

Fri, 04/04/2014 - 01:43 | 4623983 caustixoid
caustixoid's picture

OR, here's the libertarian argument that doesn't involve more regulation (because THAT has worked so well...for porn sales...from the SEC) which is DON'T PUT YOUR MONEY IN CORRUPT MARKETS. 

Fri, 04/04/2014 - 04:21 | 4624092 Say What Again
Say What Again's picture

Right, what's next.  Do you suggest we all move to montana, live in little cabins, become self sufficient, and live off the land, because that has worked so well.

Fri, 04/04/2014 - 08:28 | 4624312 Richard Chesler
Richard Chesler's picture

There really is only one way to deal with these fuckers

http://www.washingtonpost.com/news/morning-mix/wp/2014/04/04/vietnams-pu...

Fri, 04/04/2014 - 09:36 | 4624535 ilion
ilion's picture

So what that he lied. Everybody lies on TV. Is this some sort of news for anybody here?

Fri, 04/04/2014 - 09:51 | 4624620 Two-bits
Two-bits's picture

News, not really, but remember, when it becomes serious...

Fri, 04/04/2014 - 11:09 | 4624893 wallstreetapost...
wallstreetaposteriori's picture

I feel another flash crash coming.... that will wake some sleeping giants.  I am LONG Margin Calls!

Fri, 04/04/2014 - 11:29 | 4624955 Two-bits
Two-bits's picture

Damned if you didn't call it.

Fri, 04/04/2014 - 04:00 | 4624081 free_lunch
free_lunch's picture

Today Last chance to buy cheap GOLD ?

Fri, 04/04/2014 - 01:09 | 4623955 Four chan
Four chan's picture

all three really good ideas. 

Fri, 04/04/2014 - 06:37 | 4624179 El Crusty
El Crusty's picture

i have an even better idea that is guaranteed to work- no more automated trades.
a human has to enter the trade into the system manually just like in the old days when things worked a lot more like they should..

Thu, 04/03/2014 - 20:36 | 4623426 Confused
Confused's picture

Doesn't matter. He said it on TV, and people HEARD it. No one heard the statement from BATS so it might as well not have happened. 

 

And none of the douchenozzles at CNBC will mention it. 

Thu, 04/03/2014 - 20:54 | 4623481 SoilMyselfRotten
SoilMyselfRotten's picture

And there ends the television guest appearances of Bill Obrien. A truly disgusting man.

Thu, 04/03/2014 - 21:04 | 4623516 Confused
Confused's picture

Perhaps. But not his career. Which is the biggest travesty of all. 

 

This admission means nothing. And nothing will come of it. Which makes watching that clip again even more maddening. 

Thu, 04/03/2014 - 21:19 | 4623556 Handful of Dust
Handful of Dust's picture

The Laws don't apply to Wall Streeters, nor do the Commandments. Those are for the little people.

Thu, 04/03/2014 - 22:48 | 4623750 BringOnTheAsteroid
BringOnTheAsteroid's picture

Hahaha, you nailed it, commandments are for the little people. Not only that but the little people are programmed to defend the fact that they are subjugated by the church, they are the cheerleaders for their own masters. Fuckin great system if you can pull it off. The catholic church is one of the greatest scams in the history of the world. It's a multi-billion if not trillion dollar corporation that doesn't have to pay taxes and where is it's shareholders (the congragation) pay it dividends (donations). They've been implementing the concept "too big to jail" far longer than congress and Wall St. The big difference though is that adults are the victims of Wall St and only white collar crime at that, children have been the victims of the catholic church and in a far worse way than being front run or sold fraudulent investments.

Greatest fucking scam on the face of the earth.

OK, cue all the programmed minions to come out and defend their own servitude.

Fri, 04/04/2014 - 01:08 | 4623954 GooseShtepping Moron
GooseShtepping Moron's picture

Stop it with your anti-Catholic crap. Do you not see that you have no idea what you're talking about? The Commandments were not concocted by the Church to oppress the "little people," they were instituted by God for the good of man inasmuch as obeying them produces righteousness unto salvation, and were entrusted to the Church to be safeguarded, taught, and kept.

Can you explain how violating any of the Ten Commandments makes a man more God-like, or even more human?

Fri, 04/04/2014 - 05:06 | 4624127 BringOnTheAsteroid
BringOnTheAsteroid's picture

It's not your fault that you immediately rise to the occassion and defend a system that has been designed many centuries ago to subdue and control humans. The commandments - you seriously have to be kidding me. So god, the all powerful, all knowing, all . . . . . whatever the other one was . . . . . . created these commandments ???????? You have been gotten to young haven't you. Tell me, where is the "Thou shall not rape", "Though shall not torture", "Thou shall not enslave", "Thou shall not  cover up the crimes of pedophile priests who fuck little boys up the ass" commandments.

You've been brow beaten my friend, indoctrinated, brain washed. The ten commandments - bar three (maybe four) of them are a joke. This almost more than anything else shows how stupid people really are. Why not make up your own ten commandments and hang them from your wall including the commandments I mentioned above.

Yet you defend the catholic church - the harbourer and protector of pedophiles.

What about this irony, "Thou shalt not make unto thee any graven image, or any likeness of any thing in heaven above, or things which are in the earth beneath" yet the catholic church is full of images of jesus.

FUUUUCCKKKKKK - can you people string two logical coherent thoughts together.

Fri, 04/04/2014 - 10:23 | 4624747 Scoobywan
Scoobywan's picture

Why do you care so much?

Let Catholics do what they want, they aren't infringing any of your "rights" are they? And no you do not thave the right to not be offended...

I'm not catholic, don't believe in organized religion, and my wife is a god-fearing catholic that attends church every sunday. We get along just fine.

I'm stuck eating fish 7 fridays a year, but small price to pay.

Yes, I believe the Catholic church is a money making scam over a thousand years old. There are hundreds of money scams, are you as passionate about those as well?

He is defending his church, because you are attacking it......

 

Fri, 04/04/2014 - 13:06 | 4625371 malek
malek's picture

I don't believe he is claiming a right not to be offended.

He does have a right to "attack" with words the lies by pointing out facts that collide with them, and now the Catholics cannot claim a right not to be offended.

Fri, 04/04/2014 - 13:56 | 4625543 Scoobywan
Scoobywan's picture

You are correct. He most certainly does have the right to "attack" with words.

I said "you", but It would of been better worded as "no one" has the right to be not be offended.

If there is a word less offensive then "hypocrite" I do not know it, but most catholics would be that word. Including my aforementioned wife.

 

Fri, 04/04/2014 - 09:50 | 4624616 insect0man
insect0man's picture

The Whore of Babylon can go to Purgatory!

Well, it would to Purgatory if Purgatory actually existed anyhow.  

Got Candles?

Fri, 04/04/2014 - 14:55 | 4625825 merizobeach
merizobeach's picture

"The Commandments...were instituted by God"

You total fucking moron: your ten commandments were straight up plagariazed from Egypt.

Fri, 04/04/2014 - 07:34 | 4624234 lifetide
lifetide's picture

The Catholic and the Communist are alike in assuming that an opponent cannot be both honest and intelligent.   ~  George Orwell

Fri, 04/04/2014 - 02:23 | 4624013 Seer
Seer's picture

"Perhaps. But not his career. Which is the biggest travesty of all. "

No, the biggest tragedy is that children are dying of starvation while a pig like this gets to eat for doing nothing.

Fri, 04/04/2014 - 07:28 | 4624222 Confused
Confused's picture

Agreed. But within the context of the situation playing out before us, the fact that this scumbag will come out the other side unscathed is a travesty. 

 

But I get your point. 

Thu, 04/03/2014 - 22:25 | 4623710 magnumpk
magnumpk's picture

Let him know that Home Depot has nail guns on sale.

Fri, 04/04/2014 - 02:24 | 4624014 Seer
Seer's picture

Tack a note on his forehead...

Thu, 04/03/2014 - 21:21 | 4623561 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

Yeah, but did Katsuyama go to BATS in Kansas??!?!  Did he?!?!?  Huh?!?! </sarc>

Fri, 04/04/2014 - 12:40 | 4625261 Zerozen
Zerozen's picture

I'll take option 2. Watch how O'Brien pauses when he is asked the question. You can see the gears churning, it shows on his face. He's realizing he doesn't know the answer. He doesn't know the details of his own business.

Thu, 04/03/2014 - 20:52 | 4623476 spinone
spinone's picture

Bill O'Brien reminds me of every coke head I've ever met.

Fri, 04/04/2014 - 01:27 | 4623971 Squid-puppets a...
Squid-puppets a-go-go's picture

come now. he is a far cry from nigella lawson

 

Fri, 04/04/2014 - 08:20 | 4624300 WVHillbilly
WVHillbilly's picture

But, but.....he seemed so honest and truthful....

Thu, 04/03/2014 - 20:46 | 4623450 crazzziecanuck
crazzziecanuck's picture

Mr. Lewis notes in his book that it's a widespread belief that the large Wall Street banks know they can never, ever beat the HFT shops so they're chosing to not participate. 

I'm a bit more cynical.  I think it could simply be a desire by the big banks to pressure the HFTs for more money to access their dark pools.  "Pay us to stop using IEX so you can rip off our own customers like before IEX."

Or maybe I'm just paranoid.

Thu, 04/03/2014 - 21:54 | 4623642 Leboob
Leboob's picture

Bingo!!

Thu, 04/03/2014 - 22:06 | 4623664 underman
underman's picture

One broker/exchange loss is another broker/exchange gain.  Same ol story.  Sociopathic cutthroats the lot! 

Fri, 04/04/2014 - 00:01 | 4623872 piceridu
piceridu's picture

No, GS wants to eliminate HFT so it can go back to old school theft and manipulation of insider trading and trading against their clients in order to scalp their muppets.

Fri, 04/04/2014 - 02:30 | 4624017 Seer
Seer's picture

Yeah, stop this speed rip-off nonsense, go back to stealing the old-fashined way- pure insider information.

Fri, 04/04/2014 - 06:02 | 4624161 Ecclesia Militans
Ecclesia Militans's picture

+1

This makes total sense.

Insider information = premium product that the squid can transact in "the old fashioned way" 

HFT = some acne-scarred adolescent malcontent in Blablogistan can get in on that action

Fri, 04/04/2014 - 00:49 | 4623932 mrmister
mrmister's picture

Goldman is trying to get positioned before the crash as the one that warned everyone it was rigged.

Fri, 04/04/2014 - 01:50 | 4623992 Tall Tom
Tall Tom's picture

That is what the group is failing to understand. The Crash will be explained as a direct result of HFT rather than the withdrawal of QE.

Fri, 04/04/2014 - 06:15 | 4624168 eclectic syncretist
eclectic syncretist's picture

"So, let me see I understand this correctly. Goldman now wants to end HFT front-running so that it can route more (All?) trades through IEX so that it can return to a dominant position in front-running client trades?"

I would agree with that statement, but add that the big banks have probably lost a lot of control over the markets that they surreptiticiously had before.  In the old days the big banks would have likely crashed this market themselves by now in order to more quickly and effectively fleece their customers.

Thu, 04/03/2014 - 21:11 | 4623538 urrterrible
urrterrible's picture

Go Back to Fractional pricing of stocks and all this bull..... is over.  How stupid is everyone for not recognizing this.  Get your head glued on straight people, decimal system is retarded.

Thu, 04/03/2014 - 20:21 | 4623370 Freddie
Freddie's picture

BATS are total scum like Goldman Sachs.  However, Brad Kutsyama was dumb enough to send market orders and route everything through scumballs like BATS when he ran the trade desk at RBC?  Either he is a total idiot or was on the take.

And Brad and IEX with Goldman?  Anyone with Goldman is scum.  And Michael Lewis, who seems like a decent guy, looks like a fool for believing Brad's dumb story and championing Goldman's new exchange.

Thu, 04/03/2014 - 20:46 | 4623458 quintago
quintago's picture

He was dumb enough for only so long.

Fri, 04/04/2014 - 04:26 | 4623918 Say What Again
Say What Again's picture

The only way to truly get an order filled in this market is to either hit the BID (if you're SELLING) or take the ASK (if you're BUYING).  With the spreads down to a penny on most stocks, its not too bad.

If your order is large, then you need to include a discretionary option to the order, because the BID/ASK will move away from you the moment the order is placed.  The interesting thing about this, is that when you start to keep track of the slippage from real filled orders, you see that we're close to what we saw when the spreads were 1/8 of a point (0.125).  Hmmmm.  Almost like this is a universal law of the physics for trading.

You can PEG an order, and watch the HFTs move the inside BID (if you're BUYING) up by increments of 0.001 (or less).  I've watched orders of many 1000s of shares get moved up the book by 5 to 8 cents in a matter of a few seconds.  The same is true in reverse, if you're selling.  I stoped using Peg'd orders long ago.  Its just easier to do what I described in the previous paragraph.

I figured this out 6 or 7 years ago.  

In the "old days" I could BID 100 shares at the inside BID, and watch how fast the order got filled.  If it got filled real fast, then I knew someone is selling, I paid too much, and would place a BID a few pennies lower.  If on the other hand, my order never got filled, then I knew that no one was really selling large, and I might get aggressive and take the ASK.  Needless to say, none of this works anymore.

 

Fri, 04/04/2014 - 07:50 | 4624246 grid-b-gone
grid-b-gone's picture

My personal orders these days assume the buy price is lower than the quote I see and the sell price is higher than the quote I see.

Notice also, we don't have many days anymore when the major exchanges go down 2% or 3%. I assume this is by design since 2008 and the flash crash in 2010 that scared away many individual investors (and their commissions). 

Instead, we seem to have a rolling series of hits to individual stocks where they will be down 2-3% intra-day, but often end the trading day basically flat. The net result is that end-of-day headlines are usually positive, but the opportunity to buy at a discount still presents itself on a pretty regular basis. 

It is tough for the individual investor these days. Even just holding mutual funds means some "pro" is getting burned on your behalf as trades are made.

Dip buying has worked, but with multiple expansion at a historically high level, that will end eventually.

For me, the slam-dunk winner has been starting a small business. That, I can control and return on assets are pretty consistently 20%. Paying down debt is also an area where the individual can still get a guaranteed return.

Investing against billion dollar computers has changed the vaue of trading on public exchanges for the individual.  

Fri, 04/04/2014 - 09:03 | 4624448 Iam_Silverman
Iam_Silverman's picture

"Paying down debt is also an area where the individual can still get a guaranteed return."

This little gem of a truth is overlooked so very often....................

Back a long time ago, when I had a mortgage, I used to also get a very large tax refund.  All of my coworkers went on to lecture me about how dumb I was to allow the government to use my money as an interest free loan.  They went on about how it could be "invested" and would instead "be working for me".  Those dolts usually just spent the extra money in each paycheck trying to maintain their current lifestyle.  I would politely listen and then point out to them that I was getting a healthy X% return on my money.  How is that, they'd ask?  Easy, I would use the windfall tax refund to pay off a debt at X% interest.  Interest NOT PAID is the same as INTEREST EARNED.  I'm not sure that they ever really understood what I was trying to tell them.

Well, I live debt-free now, and my money just languishes away in low return savings accounts (and other safe spots).  But, when I need a new car, or home improvement, or we decide to buy a bull to improve our herd genetics - I pay cash and suddenly realize a savings over those who must finance their purchases.  So, I see savings accounts - even at no interest rates - as an offsetting type of investment (through interest avoidance).

Thu, 04/03/2014 - 23:09 | 4623787 Fidel Sarcastro
Fidel Sarcastro's picture

Freddie - ur a f*cking moron.

Fri, 04/04/2014 - 12:48 | 4625286 detached.amusement
detached.amusement's picture

no shit, comments like that make one wonder if the commenter has been paying any attention to the story at all....hey uncle freddie, you miss the part about all the sleuthing that Kats did...ya know, basically all the details of the story?

Fri, 04/04/2014 - 00:56 | 4623940 KickIce
KickIce's picture

Definitely interesting that in the same time period Kutsyama is being portrayed as a white night that Goldman suddenly announces they will move to his exchange.  They'll just use their own servers to frontrun customers.

Fri, 04/04/2014 - 07:52 | 4624250 grid-b-gone
grid-b-gone's picture

self-serving

Fri, 04/04/2014 - 05:56 | 4624158 inky
inky's picture

@Freddie

"BATS are total scum like Goldman Sachs."

Does that apply to Batman too?


Fri, 04/04/2014 - 08:36 | 4624345 GMadScientist
GMadScientist's picture

C'mon, cut Batman some slack, he's just a PTSD sufferer with a weird hobby.

http://www.youtube.com/watch?v=17CLlZuiBkQ

Thu, 04/03/2014 - 20:22 | 4623372 centerline
centerline's picture

These guys will be prosecuted and soon enough.  It is coming.  And this time examples will be made of all of them.  History is not so kind at the extremes.

Thu, 04/03/2014 - 20:28 | 4623395 fonzannoon
fonzannoon's picture

Freddie if there is one thing that is completely clear it's that this whole thing never explored how the markets are truly rigged. Yet 6 months from now when some people are in trouble and a few firms no one ever really knew are long gone CNBC can double down on it's usual bullshit propoganda and point to this "incident" as the turning point when markets were freed from corruption. Zerohedge will run the clip and ridicule it and I will vomit in my shoe and beat myself to death with it. Then I will be a lead story on here for a day as piker finance guy no one ever heard of gets added to the list of people suiciding themselves.

Thu, 04/03/2014 - 20:31 | 4623409 centerline
centerline's picture

Save the other shoe for me please.  I will gladly join you in "offing" myself in same manner (ha ha).

Thu, 04/03/2014 - 20:54 | 4623477 Pure Evil
Pure Evil's picture

If it helps, I have one slightly used nail gun for sale.

Nails sold separately.

Gold only, no cash.

Thu, 04/03/2014 - 20:56 | 4623490 centerline
centerline's picture

Ohh, gold nails.  What a statement.

Thu, 04/03/2014 - 21:11 | 4623540 ThroxxOfVron
ThroxxOfVron's picture

"If it helps, I have one slightly used nail gun for sale.

Nails sold separately.

Gold only, no cash."

Ok, fuck it; this bullshit has gone on long enough.

I'm going with Pure Evil this time.

I'm saving my golden nail for Fonz's wife.  Leave the cash on the nightstand.

Thu, 04/03/2014 - 21:00 | 4623510 Freddie
Freddie's picture

It is all a joke.  I stopped watching TV years ago but CNBC is for total retards.  They are disgusting.  Amerika is totally corrupt.

Fri, 04/04/2014 - 02:02 | 4623996 Tall Tom
Tall Tom's picture

It is theater for the masses. This whole damned stage is being set up for the excuse for the mother of all crashes.

 

They pay attention to the ring that is lit up rather than the show which is being set up.

 

P.T. Barnum's Three Ring Circus was a stroke of brilliance. They will always pay attention to the outward show without realizing that which is to come.

 

Then they complain of frontrunning?

 

Fuck!!! They need pay heed to the Rings of the Circus which are in the dark as it is Audience Participation Night and the Hungry Lions are about to be loosed.

 

You have your chair and Bullwhip handy? Hope so. You are going to need it.

Fri, 04/04/2014 - 02:38 | 4624020 Seer
Seer's picture

And, sadly, (and though I agree with you and Freddie on this), we too are talking about this, we're engaged in the distraction!

I suspect that this is what's going on, from http://en.wikipedia.org/wiki/Reality-based_community

The aide said that guys like me were "in what we call the reality-based community," which he defined as people who "believe that solutions emerge from your judicious study of discernible reality." ... "That's not the way the world really works anymore," he continued. "We're an empire now, and when we act, we create our own reality. And while you're studying that reality—judiciously, as you will—we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors…and you, all of you, will be left to just study what we do."[2]

TPTB are off making new realities.  We're, as usual, left behind unraveling the "mysteries" as they set up the new game...

Fri, 04/04/2014 - 11:20 | 4624931 dogbreath
dogbreath's picture

but its not reality any more than some hollywood dramatization of the moon landings is/was the real event that never happened.   That guy is the one deluded believing he is creating reality.  History's actors are also its biggest criminals.

I admire those who can ignore the BS  and just live life as best  they can and know how.  

Fri, 04/04/2014 - 12:50 | 4625295 detached.amusement
detached.amusement's picture

hey dogbreath, go find the youtube video of the filmmaker historian explaining why faking that was not within technological possibility at the time. 

Fri, 04/04/2014 - 13:36 | 4625487 dogbreath
dogbreath's picture

still sucking on the blue pill  I see.    what is the word for a phoney reality, its an oxymoron I know, but the quote in SEER's comment had this guy spouting how "WE" create reality.  Moon landings were a created reality. 

What do you know for sure, for sure,  the next thing you are going to say is -  why question authority?

Thu, 04/03/2014 - 21:28 | 4623572 centerline
centerline's picture

The real tragedy here is the potential setback in terms of real world finance.  People could lose sight of the necessity of connecting capital with ideas, of investment - of what Wall Street was supposed to be.  Of how people can use hard earned money to advance society and earn dividends as a byproduct.  Of the real need for accountants, finacial experts of all sorts (specialities just like lawyers and doctors and engineers - complex societies require specialization).

One can only hope that whatever happens, society is able to get back to basics quickly.

Thu, 04/03/2014 - 23:00 | 4623769 BringOnTheAsteroid
BringOnTheAsteroid's picture

Why is everybody so gob smacked at all this. What do you expect from human beings - decency, honesty, integrity  ???????

This is all a natural and inevitable path of the human spectrum, we're just all pissed because we';ve missed out on the massive profits. Believe you me, if the market flash crashed, big time, and all the shorts made an absolute killing we'd be all singing praises.

We're all the same, we're on this site because we're all looking for quick profits, us just on the downside. Life will be fair and equitable when the likes of people on ZH aren't looking for profits for no work. How are we any better than Wall St scum if gold goes to 10,000 an ounce and a whole heap of us become millionaires, what the fuck is the difference. Money for nothing is what joins us all whether gold bug or HFT scammer. Ours is just a more passive way of trying to become rich.

Fri, 04/04/2014 - 01:20 | 4623964 GooseShtepping Moron
GooseShtepping Moron's picture

I am on this site because I like to read, write, and think about economics (and other social sciences) from a philosophical perspective. I've never invested a penny in anything, ever. The modern world is a parable for those who have the ears to hear it; and Zero Hedge, wittingly or no, is one of the finer Talmudists to that Torah.

Fri, 04/04/2014 - 02:09 | 4624002 Tall Tom
Tall Tom's picture

Yeah. Wisdom is better than the finest Gold. But you had best have some of that God Ordained money (Haggai 2:8) 

 

(Habbakuk 2:6-20 fortells of the reaping of what has been sown.)

Fri, 04/04/2014 - 08:39 | 4624363 Agstacker
Agstacker's picture

I buy PM's not to 'get rich' but to preserve wealth from the theft of inflation in this ponzi scheme known as the federal reserve system.  If you want a website full of folks looking for 'quick profits' head to seeking alpha.  Money for nothing is that green piece of paper in your wallet, gold takes labor to get out of the ground and mint into a coin or bullion.  Maybe you should see a doctor about getting on an SSRI.

Fri, 04/04/2014 - 02:44 | 4624023 Seer
Seer's picture

Captial, the system of forming it, is ALL dependent on growth.  We're all dead in the water on growth.  Not thinking that any "adjustment" to the system is going to be able to overcome the physical realities in the world...

Fri, 04/04/2014 - 07:57 | 4624256 Diplodicus Rex
Diplodicus Rex's picture

Seer,

 

As I said in a previous thread I applaud your rant on the entire growth meme. It is one of my own which I expound to anyone who will listen on a frequent basis.

To Recap:

Where I would like to add to your growth rant is that the reason why we need perpetual, exponential, compouding growth is not for the sake of the growth itself but as a direct consequence of the Fractional Reserve Banking model. In this model, only the principal is ever printed out of thin air at the inception of a loan (the word "loan" having been corrupted). the interest is never printed. Therfore, for interest to be paid back you need to use the principal from someone else's loan and pay it back as your interest. The amount requiring to be paid back always exceeds that which has been printed and therefore you need an exponential rise of new principal (loans printed out of thin air) for there to be sufficient to pay back Principal + Interest.

The Fractional Reserve Banking model is at the root of the perpetual exponential growth fetish.

 

So when you talk about "capital" above. Are you talking about the old definition of capital (ie that which is left over from income nett of expenditure aka Savings) or do you mean the banking definition ie Digital Fiat printed out of thin air?

 

Thu, 04/03/2014 - 22:25 | 4623708 KickIce
KickIce's picture

CNBC:  HFT = Form of Price Discovery.  I think it was that dipshit Carl that was spewing this BS. 

Fri, 04/04/2014 - 11:37 | 4624962 Remington IV
Remington IV's picture

CNBC = apologists for scumbags

Fri, 04/04/2014 - 00:42 | 4623928 Zombie_Economics
Zombie_Economics's picture

Yeah, except this time it won't be fuzzy black and white video with a choppy frame rate.  This time the examples will be saved in full HD from a thousand angles.

Thu, 04/03/2014 - 21:16 | 4623547 Buck Johnson
Buck Johnson's picture

I think it's both, and he doesn't care.

Thu, 04/03/2014 - 22:57 | 4623759 Carbon Beach
Carbon Beach's picture

O'Brien has all the tells of a liar and was "front running the conversation," as Lewis stated. What is ironic for the President of BATS is that O'Brien's own internal algorithms were not computing, connecting, or apparently even turned on. I'm guessing BATS has a higher acceptance rate than Goldman by a factor of...

Fri, 04/04/2014 - 11:29 | 4624950 Remington IV
Remington IV's picture

BATS = morally corrupt

Thu, 04/03/2014 - 19:41 | 4623229 BeetleBailey
BeetleBailey's picture

It's really simple...

FUCKING END HFT YOU MOTHERFUCKING CRIMINALS!!!

JESUS the balls that are missing from prosecutors is stark.

 

Thu, 04/03/2014 - 19:47 | 4623256 F0ster
F0ster's picture

is not about balls, they'll through your or my ass in jail lickity split. This is about fascist corruption. HFT is the cash cow of the neo-fascists. 

Thu, 04/03/2014 - 19:56 | 4623276 gmrpeabody
gmrpeabody's picture

"the balls that are missing from prosecutors is stark"

How frickin funny..., just 60 seconds ago my wife says the same thing, then there's your post.

+100 Beetle (you too, honey)

Thu, 04/03/2014 - 20:09 | 4623328 unrulian
unrulian's picture

perhaps your wife is Beetle

Thu, 04/03/2014 - 20:24 | 4623379 centerline
centerline's picture

The "prosecutors" will be prosecuted as well.

Thu, 04/03/2014 - 22:28 | 4623715 KickIce
KickIce's picture

The thing missing is morals, the banker's balls are at eye level.

Thu, 04/03/2014 - 23:07 | 4623783 BringOnTheAsteroid
BringOnTheAsteroid's picture

Define morals.

Is it moral for any of us to make a trading profit?

Is it moral to make a single cent trading profit when you have produced nothing?

Is it moral to make a single cent trading profit when tou have contributed nothing?

It's all bullshit mate, we are all no different to Wall St traders, congressmen and financial executives, it's just different degrees of greed and corruption.

Would you ban the whole concept of trading for profit because it's immoral. I bet you wouldn't. Why? Because you have a vested interest.

Morals are subjective and there is the rub.

Fri, 04/04/2014 - 00:01 | 4623868 KickIce
KickIce's picture

Stealing is stealing, when you are inflating an asset value without adding value to a customer that pays you to represent them it is theft pure and simple.  The trade itself is not at issue as you are providing a service and should be compensated at a fair market price.

Fri, 04/04/2014 - 00:21 | 4623905 BringOnTheAsteroid
BringOnTheAsteroid's picture

But the customer is giving their money to the broker, you must see how grey this gets. If you have ten dollars in your hand and I snatch it from and run away, that is stealing. If I am a cash register operator and owe you ten dollars and five cents change and knowingly short change you five cents yes it's stealing but not enough to have any effect on you.

See how I'm playing devils advocate here. You short change someome five cents one year, ten cents the next year and soon it's a no holds bar lawless society where even the person getting ripped off doesn't care as long as his stock market portfolio is going higher. And that's where we are. No one cares because their 401K's are making them rich and they are becoming rich purely and utterly because of the criminal actions of the Fed.

We're all in it. We all deserve what's coming.

Fri, 04/04/2014 - 00:40 | 4623925 KickIce
KickIce's picture

I gotcha, but just because everyone is doing it doesn't change my view re morality on the subject.

Fri, 04/04/2014 - 02:33 | 4624019 Tall Tom
Tall Tom's picture

We're all in it. We all deserve what's coming.

What if one provides a service and does not knowingly shortchange anyone at all?

 

What if one places principles over profits?

 

Is the retailer of goods in it?

 

He does not produce that which he sells. He provides the goods and services at an advertised price.

 

He works to inventory his goods and displays them for sale. He pays the carrying costs for his inventory. He pays his help.

 

His scales are fair and accurate.

 

As he makes a profit for his efforts then is he in it?

 

Many people are like the honest shopkeeper. Are they in it?

 

There are degrees of complicity for those whom are involved. Some are much more deserving than others.

 

That is why the optimal position is to opt out as much as one can.

 

Morality is not subjective however the degree of complicity IS subjective. Stealing is immoral whether it is stealing a nickel or stealing $1,000,000.

 

The shopkeeper does not steal if he provides a service at a profit. He needs to keep his lights on as well. He needs to eat and have a roof over his head. He needs to feed his family.

 

But if he were to skim a nickel or a Million through shortchanging then that would be immoral.

 

PRINCIPLES OVER PROFITS...

Fri, 04/04/2014 - 02:57 | 4624029 Seer
Seer's picture

But... anymore there's a pension fund and a stack of other "backers" hollering at the shopkeeper to return ever-increasingly more profits for them.  You see the pressures build time and time again.  While I cannot tell a lie (I suck at it, never play poker), many can; and, let's face it, humans are deceptive, it's a survival thing.

I just don't see how we can remove human traits out of the equation, to make a "pure" system.

As I see it the only way "out" is to reduce the size of things such that fuck-ups don't have such a wide-ranging impact.  Placing all eggs in one basket is precarious.  With BIG there's such an investment that it's nearly impossible for there to be change even in the face of collapse: no empire has managed to escape collapse- that it quite telling.  I cannot, or would, "mandate" this, as force just doesn't work (and it drains precious energy that's better utilized to work constructively toward a better way/system); and, further, it's going to fail anyway.

In conclusion, we're human, we fuck up.  Adding the power of consolidated energy and computers means that we can, and will, fuck up REALLY BIG, quite possibly to the point where "do-over" isn't possible.  Reduction in scale is going to happen whether we select it or not: if not us, then nature WILL do the job.

Fri, 04/04/2014 - 03:25 | 4624040 Tall Tom
Tall Tom's picture

Seer...I do understand that many are pressured to make larger profits. I do understand that we are all human.

 

I cannot do anything about others and their behavior. I can only control myself...if that.

 

The point which I was making is that there are degrees of complicity (it is subjective as it is the subject who is complict) and that morality is not subjective, not relative, but objective.

 

Some are more deserving than others.

Fri, 04/04/2014 - 05:21 | 4624139 BringOnTheAsteroid
BringOnTheAsteroid's picture

"What if one places principles over profits?"

Simply could not agree more. The trick is getting everyone else to think the same and this is impossible because sociopaths or even many "normal" human beings will always edge into the grey area and once they are there grey becomes white so they edge a bit further. Sheesh, look at corporate lawyers, there is an entire industry set up to work the grey area of the law.

If we look at history I'm not sure terribly much has changed. We might be less brutal, that is, become more civilised but even then, when humans were at their most brutal in history there were probably vastly fewer deaths in total compared to the number the US has killed in this century and the US is supposed to be the bastion of civilisation.

 

 

Thu, 04/03/2014 - 19:42 | 4623232 medium giraffe
medium giraffe's picture

3) Couldn't give a monkey's, and probably has his underpants on inside out.

Thu, 04/03/2014 - 19:42 | 4623235 Conman
Conman's picture

I believe both possibilities are true. He is a clueless liar.

Thu, 04/03/2014 - 19:43 | 4623239 LetThemEatRand
LetThemEatRand's picture

Jinx!  You beat me to it.  You must have a faster computer.

Thu, 04/03/2014 - 19:58 | 4623296 gmrpeabody
gmrpeabody's picture

Jezuzz..., they're front-running our posts.

Thu, 04/03/2014 - 20:26 | 4623383 centerline
centerline's picture

How do I get a fiber-optic feed through the nearest wall to a ZH server?

  (edit... ohh, and if speed does not matter, why is co-location so important?  Rhetorical fucking question of course.)

Thu, 04/03/2014 - 20:30 | 4623405 fonzannoon
fonzannoon's picture

Centerline you seem up on this stuff and I know it's rhetorical...but fwiw I have posted this on and off for a few years now. Good stuff.

https://www.youtube.com/watch?v=TDaFwnOiKVE

Thu, 04/03/2014 - 20:47 | 4623443 centerline
centerline's picture

Bookmarked to watch tomorrow! Thanks.

Don't know how relevant it is to this post, but a whole bunch of years ago I helped a friend who starting an IT firm.  One of his first gigs was running CAT 5 for new office for a firm that did number crunching for Wall Street.

Being an engineer with extensive background in operations research, advanced statistics, etc. plus computer programming, I noticed the work on the white boards in said firm was not MBA sort of stuff.  Looking back, I now know it was the early stages where science really got into the system in order to exploit it.  Yeah, it's been an inside game since forever.  Those closest to the money always have had an advantage (fuck you Krugman), but now it is a free for all.  HFT is the pinnacle.

Thu, 04/03/2014 - 20:53 | 4623478 willwork4food
willwork4food's picture

It might also be their end. Who would trade any substantial sums in this bullshit quackmire on a computer? Yet millions do.

Thu, 04/03/2014 - 21:08 | 4623533 centerline
centerline's picture

The sick reality is that yield has been corned.  No longer is duration and factor.  Shit - risk is hardly a factor anymore.  It is a given. Internally, cash has nowhere to run.  And funds MUST have yield or dry up.

From an international standpoint, this is being played like a game of 3D chess.  Capital is running scared from other shores to the US and investing where it can.  US equities for one.  Real estate for another.  Just as predicted for those who did not fall into the "dollar is dead" sort of short term bullshit trap.  We have a faux recovery here funded by flushing money out of other countries.  Prettiest horse the glue factory per se - one way or another.

What other markets are open, deep, and can absorb or deflect massive capital flows?

 

Fri, 04/04/2014 - 03:27 | 4624045 Seer
Seer's picture

Years ago I'd claimed that it would come down to a massive harmonic frequency imbalance as the clash of the titans would end up with only two real players left and that the sloshing around at that point would contain so much volume/energy that it would whip-saw us into total destruction.

And the only real way that this scenario could be derailed is from "terrorists" actions.  Rock and a hard place...

“Mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly” - Woody Allen

Fri, 04/04/2014 - 03:19 | 4624039 Seer
Seer's picture

Sumpin gist ain't roght wit dis!

We're creating "God" to sort ourselves out.

I'm just not thinking that we'll be able to get the rule change in that says that Mother  Nature doesn't bat last.

Thu, 04/03/2014 - 20:57 | 4623495 Urban Redneck
Urban Redneck's picture

It's not hard to co-locate with ZH servers, it's expensive by human standards (priced in CHF), but cheap by HFT standards.

Thu, 04/03/2014 - 19:47 | 4623257 McMolotov
McMolotov's picture

Yes, he lied. But in his defense, it had gotten serious.

Thu, 04/03/2014 - 20:34 | 4623415 Gamma735
Gamma735's picture

Yes, he graduated from Jean-Claude Juncker's School of BS.  In fact he earned his BS from Juncker's School of BS.

Thu, 04/03/2014 - 20:59 | 4623506 sumo
sumo's picture

The Juncker Defence definitely applies: When it gets serious you have to lie.

The Nixon Defence is also good here: It's not a crime when the CEO does it.

And there's always the Digital Dickweed Defence: Don't blame us, it's all some fringe blogger's fault. If whistlelowers would just shut up then everything would be fine.

Fri, 04/04/2014 - 03:29 | 4624046 Seer
Seer's picture

All of these folks are paid to lie.  It's a prerequisite.  The System requires it: and its fundamental premise of growth, perpetual growth [on a finite planet], is THE LIE.

Thu, 04/03/2014 - 19:42 | 4623236 LetThemEatRand
LetThemEatRand's picture

Clueless and a liar.

Thu, 04/03/2014 - 20:46 | 4623456 centerline
centerline's picture

Glad to see you around lately LTER, always enjoy your posts.  Hope all is well with you.

Thu, 04/03/2014 - 19:42 | 4623237 bam
bam's picture

I asked him what BATS stand for and he told me it stands for BAD ASS TRADER-S. I was so impressed I promptedly handed him 100,000,000$. 

Thu, 04/03/2014 - 20:48 | 4623468 centerline
centerline's picture

SEC thinks it stands for Big Ass Titty Show.

Thu, 04/03/2014 - 19:42 | 4623238 Cash Is King
Cash Is King's picture

I'll take "the CEO is a Liar" for $1000. Alex! LOL, although the first choice is certainly plausible!

Thu, 04/03/2014 - 19:49 | 4623262 Berspankme
Berspankme's picture

O'brien reminds me of a lot of sales guys I worked with at GE. Have no fucking clue how anything works, just good at sucking clients dicks and look respectable in a suit

Thu, 04/03/2014 - 20:07 | 4623292 fonzannoon
fonzannoon's picture

He reminds me of everyone in sales anywhere. a little weasel liar scumbag. CNBC has spent the last 2 days backpedaling and claiming hft creates liquidity and thd retail investor has never had it better. i'm sure they will get right on admitting this guy was a fuckface liar.

Thu, 04/03/2014 - 20:28 | 4623394 centerline
centerline's picture

The instant he got pressed you could see him blink funny.  Check it out.  He was corned and it was pretty obvious the moment he stepped out and started making shit up!

Thu, 04/03/2014 - 21:04 | 4623518 willwork4food
willwork4food's picture

I am in sales as a part of owning my own small company. I have suggested customers not to spend extra money on many items that I believed were not in their best interest. Your word (and karma) will follow you through the rest of your life.

Thu, 04/03/2014 - 21:14 | 4623543 centerline
centerline's picture

Still struggling with the karma concept from a broader perspective... but on a smaller scale I just know that it is spot on.

Just commenting on this because I thought it was a really cool statement ww4f.

Thu, 04/03/2014 - 21:40 | 4623596 shovelhead
shovelhead's picture

Your word may follow you but karma only shows up tp the party when you're dead.

Be nice.

You don't want to end up as a gerbil in a pet store in the Castro district.

Thu, 04/03/2014 - 23:20 | 4623808 August
August's picture

It is illegal to purchase, import, or keep a gerbil as a pet in California

See 14 Cal. Code Regs. § 671(c)(2)(J). The prohibition imposed by the California Fish and Game Commission also applies to all other members of order Rodentia, except for "domesticated races" of rats, mice, golden hamsters, guinea pigs, and chinchillas.

Ain't ZH a wonder!

Fri, 04/04/2014 - 02:41 | 4624021 Tall Tom
Tall Tom's picture

Okay...You do not want to end up as a Gerbil being sold on the Black Market in the Castro District...

Fri, 04/04/2014 - 03:38 | 4624057 Seer
Seer's picture

Wall Street.  Liar.  Two peas in a pod... We were expecting?

Fri, 04/04/2014 - 04:45 | 4624117 ebear
ebear's picture

"Wall Street.  Liar."

Redundancy Alert!

Thu, 04/03/2014 - 19:43 | 4623241 disabledvet
disabledvet's picture

I vote for Number One.

Heeere Yee, Heeeere Yee! May it be so noted in the record that YOU fine sir are a fraud and wiesencracker! Now go away or we shall pay ye even more of our ill gotten loot'ngain!

Thu, 04/03/2014 - 19:44 | 4623245 Seasmoke
Seasmoke's picture

He Has no clue how it works, but loves the benefits and had no intentions of ever finding out how they work. 

Thu, 04/03/2014 - 19:46 | 4623253 fonzannoon
fonzannoon's picture

when do we talk about quote stuffing?

Thu, 04/03/2014 - 20:05 | 4623314 Unknown Poster
Unknown Poster's picture

Could somebody rant about momentum ignition?

Thu, 04/03/2014 - 19:46 | 4623254 monoloco
monoloco's picture

What a lying douche bag. I guess he thinks everyone is stupid and no one would check his statements.

Thu, 04/03/2014 - 19:55 | 4623255 Kaiser Sousa
Kaiser Sousa's picture

i keep telling ya'll...

those on Fraud Street and the MoneyChanger as well r sociopaths...

sociopaths r pathological liars...

"suprise, suprise, suprise...."

Gomer Pyle

"DEATH TO THE MONEYCHANGERS...."

Kaiser Sousa

Thu, 04/03/2014 - 19:50 | 4623267 Pumpkin
Pumpkin's picture

You mean to tell me the theives are liars?  No way!

Thu, 04/03/2014 - 20:32 | 4623410 Freddie
Freddie's picture

The markets are a joke and the USSA is totally corrupt.

Thu, 04/03/2014 - 19:54 | 4623274 rlouis
rlouis's picture

What a putz.  It's #2 first and then #1.

Thu, 04/03/2014 - 19:55 | 4623278 Cacete de Ouro
Cacete de Ouro's picture

BATS backward is STAB

where is Ozzy Osborne when you need him?

Thu, 04/03/2014 - 19:56 | 4623286 khakuda
khakuda's picture

January 2015?

I promise I'll be good! Just let me fuck you up the ass for another nine months.

Thu, 04/03/2014 - 19:56 | 4623287 alangreedspank
alangreedspank's picture

The distinction matters because high-speed traders can use powerful computers and superfast links between markets to outpace traders and trading venues that rely on slower market data, such as the SIP.

That still doesn't explain why people say they can front-run with other brokers' client information.

Thu, 04/03/2014 - 20:02 | 4623308 MeelionDollerBogus
MeelionDollerBogus's picture

no, but now they HAVE to answer 'why' since now they can't deny the machinery is there to do it.

Thu, 04/03/2014 - 20:17 | 4623347 alangreedspank
alangreedspank's picture

yeah but unless they're hacking, packet sniffing at the big central internet hub in NY (oh the name escapes me) and of course decrypting them all, have some backdoor at the exchange(s) or some faster web services they poll the books with, it's impossible IMO.

Who do you think could help them do this? Clue: it's an alphabet government agency we've heard of quite a lot lately.

Thu, 04/03/2014 - 20:53 | 4623482 centerline
centerline's picture

Unless you know specifically how it works this is speculation.  Applause for the thoughts here.  +1 from me.  No stone unturned here in my opinion.  But, the whole concept of co-location (shorter physical distances) says enough in the first place.  That is just physics.  If the programming to enable this goes further... well, that is just gravy since intent is already established.  Done deal baby.

Thu, 04/03/2014 - 22:15 | 4623688 Unknown Poster
Unknown Poster's picture

I don'treally understand this, but they can see when you check on the various prices at the different exchanges. By the time the info gets back to you and you make a decision, the prices and market depth have changed. The HFTs are closer so they get the info and make a decision before you.

Sun, 04/06/2014 - 06:37 | 4629523 MeelionDollerBogus
MeelionDollerBogus's picture

Look I know you think that's very clever but I'm about to make you haz a sad.

They can figure out both your trend of preferred tickers & dollar figures and your maximum from spying your transactions and your current balance & permitted leverage before you even submit a trade.

Do NOT follow this link or you will be banned from the site!