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"High Frequency Minutes": HFT Explained In 6 Short Video Clips

Tyler Durden's picture





 

After over two years of over 200 posts discussing the dangers of High Frequency Trading on Zero Hedge, the mainstream media (and its comedy-finance fusion Comcast offshoot) has finally made its goal in life to destroy HFT. The only reason for that, of course, is that HFT, by definition, tends to accentuate moves. And while it did so to the upside, nobody but Zero Hedge and a very few other blogs, most notably Themis Trading, cared (and a whole lot of other "experts" ridiculed our views of HFT as liquidity extracting, because yes they are, rebate chasing, sub penny frontrunning parasites). Now that the tables have turned, everyone, up to and including that caricature Jim Cramer can't get enough of bashing it. Which is why for anyone still relatively new, and thus unjaded, to the topic, we present this informative and succinct six-part videoclip series just released by Securities Technology Monitor titled "High Frequency Minutes" discussing all the latest paradigms in the world of modern cutthroat, nanosecond trading.

HIGH-FREQUENCY MINUTES: Do Microseconds Matter?

Why trading that occurs in microseconds should not matter to Aunt Minnie in Lenexa, Kansas.

Securities Technology Monitor editor-in-chief Tom Steinert-Threlkeld is interviewed by Peter Fednysnky, New York correspondent for the Voice of America.


 

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HIGH-FREQUENCY MINUTES: How Microseconds Matter

What is a millisecond? Why does it matter? Particularly, when what really counts is the microsecond -- and a distance of 20 miles could mean your exchange is in the wrong place.
 
Securities Technology Monitor editor-in-chief Tom Steinert-Threlkeld is interviewed by Peter Fednysnky, New York correspondent for the Voice of America.


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HIGH-FREQUENCY MINUTES: The Hidden Story of High-Speed Trading

It takes no time to create a trade. But three days to settle it.  Securities Technology Monitor editor-in-chief Tom Steinert-Threlkeld is interviewed by Peter Fednysnky, New York correspondent for the Voice of America.

 

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HIGH-FREQUENCY MINUTES: Preventing the Runaway Algorithm

Why a runaway algorithm that wreaks havoc on volatile markets may be inevitable -- and whether algorithms should be tested before put in use. Securities Technology Monitor editor-in-chief Tom Steinert-Threlkeld is interviewed by Peter Fednysnky, New York correspondent for the Voice of America.

 
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HIGH-FREQUENCY MINUTES: High-Speed Regulation

The sooner the SEC gets on with instituting a system for monitoring all trading at the same speed that it takes place, the better. Securities Technology Monitor editor-in-chief Tom Steinert-Threlkeld is interviewed by Peter Fedysnky, New York correspondent for the Voice of America.


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HIGH-FREQUENCY MINUTES: The Next Second

This final segment of this six-part series looks at how algorithmic trading is about making a profit in the next second. Not the long haul. What is the implication? Securities Technology Monitor editor-in-chief Tom Steinert-Threlkeld is interviewed by Peter Fedysnky, New York
correspondent for the Voice of America.


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Wed, 09/14/2011 - 00:06 | Link to Comment Denver768
Denver768's picture

Down with the machines.... and their corporate controllers, who distort the markets and fleece the economy.

Wars may be fought with weapons, but they are won by men.
- General George S. Patton Jr

 

 

Wed, 09/14/2011 - 01:16 | Link to Comment KingPin 999
KingPin 999's picture

Does anyone need any more evidence that these guys need to find real jobs after hearing this douchebag talk. These guys are parasites that take liquidity not provide it.

Wed, 09/14/2011 - 02:47 | Link to Comment OldPhart
OldPhart's picture

What I got out of this...

If you want to take down the exchanges, blow the shit out of New Jersey.  Particularly Malwa(?), Wehocken, etc.  The guy lays out the locations of all the servers for the exchanges.  Akmed, the dead terrorist, thanks you.

Jesus Christ!  Attention terrorists...here's your game plan!

And this is on Voice of America!  The propaganda we pump into every other country in the world.  What the fuck is this guy doing?

Wed, 09/14/2011 - 07:40 | Link to Comment Tortuga
Tortuga's picture

I have the same thought when I see the boneheads of the drive by media show the locations of our petro. pipelines, power plants, military bases and population centers on TV. Hell, I drive by a Lockeed and bell plant every day that have large signs @ their entrances. 

Wed, 09/14/2011 - 00:10 | Link to Comment TruthInSunshine
TruthInSunshine's picture

I have a hunch that the con men/women are now beating HFT black & blue because it gives the appearance that they're "really gonna' clean up these fraud saturated, criminal rackets known as 'markets' come hell or high water," when in reality, HFT is just a mere sliver of the Fraudpocalypse Pie.

They need the retail sheeple back in the markets for one last good fleecing.

But it's not going to happen. They'll need to find away to get as much of those 401(k) prisoners' accounts as they can, while they still have cover and fueled jets on the tarmac.

Wed, 09/14/2011 - 02:31 | Link to Comment gorillaonyourback
gorillaonyourback's picture

yep, privitize whats left of social security,,,,, lololol one last good fleecing

Wed, 09/14/2011 - 00:10 | Link to Comment zorba THE GREEK
zorba THE GREEK's picture

There is always two sides to a trade. When someone makes money, someone loses money.

And since only a privileged few can do HFTs, the rest of the traders are at a disadvantage. 

The more unfair trading that is allowed, the more traders will shun the markets.

Wed, 09/14/2011 - 11:46 | Link to Comment raki_d
raki_d's picture

So - you are saying stocks are zero-sum game... NO- They are not

Wed, 09/14/2011 - 00:33 | Link to Comment Boner Jamz 03
Boner Jamz 03's picture

So if a significant amount of people were to Twitter "$x (x=HFT darling) bearish/ugly/down/free fall/etc." whilst taking out massive short positions... no, couldn't possibly be that easy...

Wed, 09/14/2011 - 00:34 | Link to Comment krilj
krilj's picture

I can't watch this guy mutter through his explainations....

 

All that matters is they can front run my trade at 49.999 when I have a limit sell order at 50.  They take my position and flip it immediately, potentially leaving me unfilled if the market does not trade though 50.  

 

If I don't get my fill to short, then I'm not there to provide liquidity to cover at a profit when the shit hits the fan.

 

So enjoy your next flash cause I'll have my hands in my pockets instead of buying stock.

Wed, 09/14/2011 - 00:40 | Link to Comment Arkadaba
Arkadaba's picture

What is really crazy ... is that these HFT or people interested in it are hiring Perl hackers at an unprecedented rate. I was on LinkedIn today and there were around 30 jobs in Stamford, NYC and NJ for Perl Hackers. And I love Perl. It is great for trolling through logs, R&D in unstructured text and setting up some sys admin jobs. It is my favorite language - but - no way would I reccommend it for a corporation aside from prototyping. Just not really secure. 

Wed, 09/14/2011 - 01:24 | Link to Comment lano1106
lano1106's picture

and really not fast when you compete with people now down to the metal with FPGA!

 

Wed, 09/14/2011 - 23:16 | Link to Comment Arkadaba
Arkadaba's picture

Ha ha - had to look that up. Too low level for me (mean that in a good way).

Wed, 09/14/2011 - 00:56 | Link to Comment HarrisonBergeron
HarrisonBergeron's picture

I suppose when you are writing alogrithms that will be useless in 2-3 weeks the security is "no big deal" not saying I agree but that is likely the mentality. On another note about the security of code. How long will it take until a sovereign or even a major bank realizes the the notion of creating $ or Eur on a screen is just that; a notion. At some point the criminogenic environment that Bill Black describes should, in theory tempt some manager to direct a programmer to just create money. I wonder very seriously how secure and robust to hacking the Fedwire system is. In my opinion if the system were breached, even minutely that could call a large number of assumptions into question.

Wed, 09/14/2011 - 01:09 | Link to Comment JW n FL
JW n FL's picture

 

 

The Latency webcast.

* When you are ready, please login by clicking on the link below:
http://mediazone.brighttalk.com/comm/IRD/8f21933cac-26610-4261-23629

 

http://www.youtube.com/watch?v=d9TnMUlIBKQ&list=FLbRZZAixeFXZfqszvKisEdQ&index=1 <-------------------- or! LOL!!

Wed, 09/14/2011 - 01:26 | Link to Comment TheLooza
TheLooza's picture

NNEEERRRRDDDDSSSS!!!!!

Wed, 09/14/2011 - 01:29 | Link to Comment JW n FL
JW n FL's picture

 

 

I LOVE TURTLES BITCHEZ!

I am NO! Nerd!!

 

Wed, 09/14/2011 - 02:00 | Link to Comment Yamaha
Yamaha's picture

This guy has missed a great opportunity to be the STOP SMOKING GRASS poster child........

Wed, 09/14/2011 - 07:31 | Link to Comment Tortuga
Tortuga's picture

Wow, great,informative, scary interview. I can tell that Tom is more comfortable speaking in math. Zorba made a comment that got me to thinking that maybe there is a 3rd side to all trades, @ 7000 trades a second, the "false trade", that is dropped. How does this effect momentum? And, I sit here and make my trade @ $7.95 in and then out, I'm wondering if the HFT's pay for the trades, say @ 6000 or so a second, more than a few pennies, because it's all about profit for the brokers and exchange. What exciting times we live in. Coffees ready.   GBA and RICO all banksters and their prostitute politicians. 

Wed, 09/14/2011 - 07:36 | Link to Comment apberusdisvet
apberusdisvet's picture

Welcome to the Wall Street Casino, where the waitresses give free Jim Jones Koolaid, on the Blackjack tables the dealers have a separate deck containing only Aces and Face Cards, and the slots have a payout of .00007%.

Wed, 09/14/2011 - 12:33 | Link to Comment prains
prains's picture

chinese hackers...............................whooooopeeeeeeeeeeeeeeee!!!!!

 

red fucking alert.

 

HFT is like putting your balls in someones hands so they can squeeze as hard as they like and asking them which hand do you want them placed.

There simply is not enough popcorn left for this shit show. 

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