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The HFT Blowback Continues: Fidelity Creates New Trading Venue

Tyler Durden's picture




 

In what the firm believes will be an improvement over other so-called dark pools because it will be a collaboration among big mutual-fund firms, WSJ reports that the giant fund manager is quietly building a new trading venue designed to let big money managers sidestep many of the problems that they argue lead to unfair or costly trading - i.e. avoid the HFT predation. Fidelity, with $1.95 trillion of assets under management, is in the initial stages of planning the trading venue and has just begun to pitch the idea to other large asset managers. It seems 5 years of vociferous exposure and a Michael Lewis book may be beginning to starve the HFTs of their prey.

 

As WSJ reports,

The venue, if successfully launched, would represent an ambitious effort to reduce costs and streamline trading for the investment firms. The project is tentatively named "Sakura," which is the Japanese word for cherry blossom, according to people familiar with the matter.

 

...

 

Plans for "Sakura" are emerging alongside a broadening debate about the fairness of the U.S. equity markets. Discussions have been stoked in part by a new book by Michael Lewis that alleges the markets are "rigged" in favor of exchanges, high-frequency traders and big banks at the expense of retail and institutional investors.

 

...

 

The new trading system would be different from the dark pool already operated by Fidelity called CrossStream.

It seems, the guys at Goldman were on to something... Perhaps, like Goldman, Fidelity knows that "unless things change, there's going to be a massive crash - a flash crash times ten..."

 

And that would not be good for Fidelity's AUM...

 

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Thu, 04/10/2014 - 20:58 | 4645787 fonzannoon
fonzannoon's picture

""The questions are going to be: what are you adding to the market? What differentiates your dark pool?"

wtf... is it just me on here tonight? Is this thing on?

Thu, 04/10/2014 - 21:14 | 4645825 Sathington Willougby
Sathington Willougby's picture

Wait until Ntrepid clears a buffer or two, then you can have all the witless interference you desire.

Thu, 04/10/2014 - 21:15 | 4645826 NoDebt
NoDebt's picture

Selling point #1:  Hey, at least we're not Goldman Sachs.

 

Thu, 04/10/2014 - 21:21 | 4645843 insanelysane
insanelysane's picture

The HFTs feast on the mutual funds.  The mutual funds get deposits each week and must buy.  The HFTs just sit and front run when they see the weekly orders coming in.

Thu, 04/10/2014 - 22:46 | 4646121 monkeyboy
Thu, 04/10/2014 - 20:58 | 4645790 nmewn
nmewn's picture

"The project is tentatively named "Sakura," which is the Japanese word for cherry blossom, according to people familiar with the matter."

The cherry blossoms in Washington DC reached "full peak" TODAY, did they?

Well, isn't that nice ;-)

Thu, 04/10/2014 - 21:10 | 4645815 Sathington Willougby
Sathington Willougby's picture

Well when I got out of bed this morning it dawned on me, what the world needs, what it's been pining for, an answer to all the problems, another dark pool.  In my feeble minded state I then contemplated also another tax or three.  Then I woke up and kicked my own ass.

Thu, 04/10/2014 - 21:23 | 4645845 Pure Evil
Pure Evil's picture

Foots in asses, can't get any better than that.

Fri, 04/11/2014 - 07:03 | 4646670 ebear
ebear's picture

"The project is tentatively named "Sakura,"

That calls for a theme song!

http://www.youtube.com/watch?v=H-9eYkg6Bdk

Thu, 04/10/2014 - 21:13 | 4645806 Sathington Willougby
Sathington Willougby's picture

I am entitled to riskless returns in the stawk market cuz I voted once and I wasn't even that drunk.

Thu, 04/10/2014 - 21:14 | 4645822 Yes_Questions
Yes_Questions's picture

 

 

So, I'll put my retirement there then?

 

Cherry Blossoms seem nice..

Thu, 04/10/2014 - 21:16 | 4645828 NoDebt
NoDebt's picture

No, but millions of people ALREADY have their retirement funds there.

Thu, 04/10/2014 - 21:24 | 4645852 Miffed Microbio...
Miffed Microbiologist's picture

I don't know. Doesn't seem to safe to me. I'm sticking with my MyRA with the full backing of the US government.

Miffed;-)

Thu, 04/10/2014 - 21:37 | 4645898 nmewn
nmewn's picture

Absolutely!

No government script has ever gone bad, its not like they're France or Germany or Zimb...

Wait a minute...lol.

Thu, 04/10/2014 - 22:03 | 4645992 Miffed Microbio...
Miffed Microbiologist's picture

Uh oh... Someone needs a glass of Sunshine and stop studying history.!

In Zimbabwe the government confiscated privately owned farms before the hyperinflation. So they got starvation and worthless script. A twofer! I'm sure with this beef " crisis" looming we can guess the next move. Hey... If I'm right the first round is on me from my private stash!

Miffed;-)

Fri, 04/11/2014 - 06:23 | 4646632 nmewn
nmewn's picture

And isn't it odd, that they want us to lock it all up in an "electronic vault" (for our convenience, of course)?

Why, a suspicious person might think something was amiss ;-)

Fri, 04/11/2014 - 10:56 | 4647448 Miffed Microbio...
Miffed Microbiologist's picture

" our convenience" ... As in To Serve Man being a cookbook? A Bitcoin by any other name would smell as sweet.

Miffed;-)

Thu, 04/10/2014 - 21:23 | 4645850 Bill of Rights
Bill of Rights's picture

Hmm if I didn't know any better I would swear the Vulchers have picked the Dead Carcass to the bone.

Thu, 04/10/2014 - 21:28 | 4645867 new game
new game's picture

fidelity-ugly ugly-getting a 403b outta there-was a nightmare. did finally, with much bullshit-endless hoops.

eventually got it transfered to ameritrade and transfered it out smoothly thereafter. fidelity would not let us cash out. i called them on there violation of law-didn't matter, so we transfered...

all our money outside of any laws of this government. taxes paid ect. fuck 401's, iras sepiras...

and you have been warned about fidelity...

Thu, 04/10/2014 - 21:30 | 4645875 logicalman
logicalman's picture

..... and the government!

 

Thu, 04/10/2014 - 21:35 | 4645892 NoDebt
NoDebt's picture

Fidelity is the retail torture chamber.  Your experience is not unique (though I don't recall them playing in the 403(b) world).  I don't use their stuff- ever.  Their house-brand mutual funds are almost universally the lowest quality, lowest value piles of crap on the planet.

 

Thu, 04/10/2014 - 21:49 | 4645938 ebworthen
ebworthen's picture

If there is a large pool of money somewhere the Predators will get to it; and .gov has their back.

Fidelity is just making a P.R. move to keep those I.R.A./401K sheep in the pen.

Lots and lots of people taking money out because they need it.

Others because they know it's a rigged Ponzi.

Scares the shit out of the likes of Fidelity.

Thu, 04/10/2014 - 23:53 | 4646292 ReactionToClose...
ReactionToClosedMinds's picture

Old American Century, before JPM acquired them, was keenly sceptical of Wall St firms they had not done business with for years.... took a long time to make a 'breakthrough' with them

Fri, 04/11/2014 - 05:03 | 4646594 Flying Spaniard
Flying Spaniard's picture

"Money, money, money, is so funny, in a rigged man's world..."

Fri, 04/11/2014 - 06:53 | 4646663 Sokhmate
Sokhmate's picture

cherry popping

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