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Man Vs Machine: How Each Sees The Stock Market Part 2

Tyler Durden's picture


Two weeks ago we shared a post on the topic of variant perception, specifically how the two distinct classes of market participants, humans and machines, view their natural habitat. Judging by the interest in the article, this approach to breaking cognitive dissonance was quite welcome, which is why courtesy of Nanex, we bring you part two.

This is what you see:

This is what HFT-bot (which according to the SEC provides liquidity by lifting limit offers) sees:

The actual move up took just 275 milliseconds:


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Fri, 04/13/2012 - 18:36 | Link to Comment Stares straight...
Stares straight ahead's picture

I see dead people...

Fri, 04/13/2012 - 19:09 | Link to Comment SilverTree
SilverTree's picture

Pure criminal.

Fri, 04/13/2012 - 19:39 | Link to Comment AldousHuxley
AldousHuxley's picture

From RedditI work in Wall Street and work in hedge fund analysis. I’m the only person in my office who supports OWS

It’s important to know how exactly the hedge funds, along with the financial markets are destroying the 99%.

Hedge funds. These guys are basically the vehicles of choice for ultra-rich people to get into the financial markets, besides family offices and private wealth managers. What are hedge funds? They are funds that have a 1-5 million deposit minimum, cater to the mega-rich, and can invest in anything without regulatory restrictions, use leverage to pump up their exposure by 15x, and pretty much eat up a vast majority of the industry’s profits.

These guys invest in EVERYTHING. Instruments you’ve heard of – stocks, bonds, forwards, futures, currencies, and instruments that you, me, or anyone else have never even heard of, much less know anything about: commodity future swaptions, FRA/OIS swaps, CLOs, exotic future options, p-notes, index/commodity/equity exposures, and a huge array of OTC (over-the-counter) instruments that no regular investor would ever have access to.

Why I bring this up: the financial markets are rigged. 99% of the investing public has access to services such as basic brokerages, 401k/IRA’s, mutual funds, pension plans, etc. Some of these services, especially pension funds, will invest into hedge funds, who take an additional 2 and 20 (meaning 2% of assets plus 20% of capital gains).

What this means is that if you go any of the traditional retail routes, you are utterly screwed facing off against the hedge funds.

First, you are paying exorbitant fees. Commissions on every stock trade. Mutual fund managers taking a cut – an annual % cut, as well as a % per profit cut. If these managers (i.e. pension plans) invest in another fund, that fund is also taking another % cut. You’re down 2% the minute you invest your money.

Next, if you’re doing the investing yourself, you’re paying ridiculous spreads. The bid/ask spread of a stock will cause you to be down another 2-3% the minute you buy the stock. For example, if you’re buying a share of company at $4.25, you can sell back at only $4.15.

Furthermore, you have absolutely no chance in terms of access to the best services. Hedge funds have a direct line to investment bank’s institutional brokerage teams – these are the guys that spend day and night sucking up to hedge funds, trying to get them the best deals at the cheapest rates. This means that while you’re buying stocks and bonds, hedge funds are getting special rights, warrants, sweetheart deals, private placement deals, options, bigger discounts on bonds, and much better bulk commission rates and lower spreads on stocks. If you’re paying 4.25$ for a 4.15$ stock, they are paying something like 4.16$. And they are eating alive your profits because when the stock goes up to $4.30, they can activate another warrant to purchase 20m shares at $4.25, diluting the value of your shares.

Next, you lack information and exposure. You have no idea what is going on in the market besides what you see on the news – while hedge funds have analysts working around the clock and a bunch of service providers who give minute-by-minute analysis of their portfolio opportunities and weaknesses in all markets with exposures to nearly everything. Meaning, if there is an opportunity in the real estate market (i.e. legislation), it might take you weeks to get in – hedge funds will have gotten in the minute the legislation was passed. Furthermore, when IPOs come out for companies, hedge funds get top billing on the primary market shares – which means investment banks are selling directly to them. Once the secondary market becomes available, hedge funds are up 15-20% on these investments, sometimes within hours.

Finally, you have no capital compared to these hedge funds. The people who invest in these hedge funds are not just the 1%, they are the 0.1%. These are the guys with 500million dollar bank accounts and the ability to do whatever the fuck they want. Hedge funds know this, and they invest without having to care about whether their clients can pay the rent or send their kids to college. All of that is irrelevant. Their sole purpose is to earn money, not to mitigate risk.

What does this all mean? It means the hedge fund industry is making a gigantic proportion of the profits. The top .1% is earning nearly half of the profits in the industry, through not just hedge funds, but other similar vehicles.

The finance industry is a complete scam, designed to funnel money from the 99% investing public into the hands of the top .1%. Sure, some of you will make good money, but stastically, the rest of us will lose, and who is feeding off us? Hedge funds, and the .1%. You have better odds going to a casino and playing slots, the worst-paying game in the house, but still better than the stock market.

Also, the government is in bed with the financial industry. Tax loopholes give hedge funds and other top players the ability to write off losses and not pay taxes on gains for years at a time. For income they derive from the hedge fund (profits), they pay only 15%, rather than the 35% income tax charged to most people earning 80k and above. Meanwhile, you have to pay taxes for not just your own income but also capital gains.

The worst part by far is that the government “encourages” you to put your money into your 401k through ‘tax exemptions’, which basically puts your money with the lowest tier of the financial industry – pension funds, retail wealth managers, and retail asset managers. These guys have shit strategies like long-only or domestic equity (which means they only invest in American stocks), and have nowhere near the capability and reach of hedge funds. These guys are even more likely to lose your money than you are, and even worse is they will take a 2.35% cut while doing so. And you get penalized when you try to take your money out early. How f***ed up is that.

In other words, if you aren’t in the .1%, you have no access to the derivatives markets, you have no access to the special deals that hedge funds and other wealthy investors get, and you have no access to the resources, information, strategic services, tax exemptions, and capital that the top .1% is getting.

If you have any questions about what some of the concepts above mean, ask and I will try my best to answer. I’m a first-year analyst on wall street, and based on what I see day in and day out, I support the OWS movement 100%.

tl;dr: The finance industry funnels money from the masses to the ultra rich, through vehicles like hedge funds which dominate all of the financial markets.

Fri, 04/13/2012 - 20:00 | Link to Comment Element
Element's picture

But they say that like it's a bad thing!                     /s

Tue, 06/26/2012 - 16:14 | Link to Comment SteinRobyn17
SteinRobyn17's picture

Man Always wins but some time machine .. hoist ring

Fri, 04/13/2012 - 20:55 | Link to Comment killallthefiat
killallthefiat's picture

ZH commenters now sound like a bunch of po' folk that are embittered that they are not eligible to be part of a hedge fund.


"The poor you will always have with you." JC

Fri, 04/13/2012 - 21:22 | Link to Comment AldousHuxley
AldousHuxley's picture

there is no poor vs rich. It is capital vs. labor.

If you have wage income then you are poor in the world of family offices. (Obama has presidential wage income, but he still gotta show up for work in the white house kissing ugly babies for photo ops and such)

If you own assets have capital gains then you are eligible. (ie. Romney reported $0 wage income on this tax returns; he's got the FU money)




Sat, 04/14/2012 - 04:34 | Link to Comment putaipan
putaipan's picture

big up the cut and paste aldous. -1 the reddit tho.


Sat, 04/14/2012 - 07:08 | Link to Comment Clamdigger
Clamdigger's picture

-1 the reddit tho.

Wait, what? Clearly, you have not visited reddit/r/ginger.

Sat, 04/14/2012 - 06:14 | Link to Comment lewy14
lewy14's picture

Capital views Labor as the internet views censorship: it's damage, and it routes around it.

Capital has wanted to do this for milenia. With the help of technology, over the last decade, it's realized the dream.

Labor's only remaining option is to capture the State. Hence the intensity of the current political polarization.

But be assured, "Labor" is not identical with working people. This is really just a fight over which gang runs the prison, so color me unimpressed with the "principles" and "ideals" that any party brings to this fight.

Mon, 04/23/2012 - 02:35 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

That's absurd. Labor is just another form of capital and other kinds of capital seek to be traded at minimal entropy - be it intellect, muscle, dollars, gold or arbitrage of a loan vs expected ROI for how that loan is used.

Man, you sound almost socialist or stuck in a commies-vs-capitalists dogma. It just ain't that way.


Fri, 04/13/2012 - 21:03 | Link to Comment WmMcK
WmMcK's picture

"Go invest in something real and tangible.
Create something of value."

Don't fight the algos and HFT.

Fri, 04/13/2012 - 21:08 | Link to Comment candyman
candyman's picture

So i was wrong for buying apple at 120. Man I'm fucked

Fri, 04/13/2012 - 21:36 | Link to Comment illyia
illyia's picture

Thank you AH. Very useful.

Fri, 04/13/2012 - 21:47 | Link to Comment Wotnext
Wotnext's picture

So well a way that a mere lurker such as myself can appreciate.  It is tempting to side with the OWS movement and lend them support, but there are legit questions surrounding who is actually funding this movement and what the ultimate purpose may be.  Being a faithful reader of Zerohedge makes one want to question just about everything.








Sat, 04/14/2012 - 06:12 | Link to Comment StychoKiller
StychoKiller's picture

About the ONLY Truth I know is my wife and family...

Sat, 04/14/2012 - 10:50 | Link to Comment ihedgemyhedges
ihedgemyhedges's picture

I've been married 18 years.  Wife = truth????????  BS.  Wife = piece of paper at the courthouse.  My two baby girls are the only truth I know.  They may break my heart with bad decisions, but they can't have an AFFAIR on me......

NEVER trust a piece of paper at the ain't blood................

Mon, 04/23/2012 - 02:31 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Generally the OWS people are not funded. There's a few web sites collecting donations to try to get ustream equipment after police stomp all over it or smash it with batons, or food to protesters and camping equipment but some of that's changing. Cities are cracking down hard on the tents so now it's foreclosure-reversals - take over a home in foreclosure, put a homeless family back into it. It's time & effort. They're pissed enough they have nothing else to do or lose.

Sat, 04/14/2012 - 04:18 | Link to Comment Yorick7
Yorick7's picture

I totally disagree with most of what was said in this post.  The retail investor has unprecedented access to most markets now and pays market spreads for most things these days if they are clever and trade on the right platform and u can get the same leverage as most HF.  By the way most HF lose money, they may do well for a year or two and then implode on themselves.

I agree that it's difficult to compete with HFT but once you realise that you can change your game plan.

I would find another job if you are a first year analyst on Wall Street and think the game is so rigged, if you think it's rigged then figure out how it is and take advantage of that.

Sat, 04/14/2012 - 15:26 | Link to Comment Eclipse89
Eclipse89's picture


Sat, 04/14/2012 - 07:59 | Link to Comment t0mmyBerg
t0mmyBerg's picture

I too support OWS, not their goals - to the extent they have any - but the fact they are pissed off that something bad is going on (the Fed and what the government has done for Banks and the general crony environment that has taken root, but they do not know that).  I also run money (call it a hedge fund if you wish).  Frankly, given the violently poor nature of the reasoning in this comment, I am surprised you have a job on Wall Street.  Dont get me wrong, there is plenty of sheisterism out there, and very occasionally someone goes to jail (Raj Rajaratnam (sp?) for instance on insider trading I think).  But the crap you complain about in this rant really isnt the problem.  Is there something inherently wrong with sophisticated investors trading esoteric instruments that retail people would not trade?  I do not think so.  Bid/ask spread a problem?  Put in a limit order and you are in the book just like anybody else (probably are some issues with off-exchange trades and you will likely not get filled until the market goes through your price, I am sure there are some issues here but that is not a matter of the hedge funds but of exchange rules and regulatory oversight by idiots that do not even understand such basic ideas as what liquidity is - that is the quality of individual you typically get in government service). 

The hedgies have analysts working to give them an informational edge.  Well yeah, thats the way it is.  Wouldnt you?  Our fund is small.  Guess what, I work 15 hours a day to keep up.  I pay several services to do research for me.  I soak it all in and make decisions.  Now I get to do this all day so yeah I have an edge I guess over someone who is obligated to work and collact wages/salary in some other manner.  Oh well, is there something wrong or immoral about it?  I do not think so.  The Hedgies have all the capital.  Well duh.  And?  Basically this is just a rant that rich people suck.  Well, some do and some do not.

Later on you rant about labor versus capital.  And there is a problem in that the share of national output going to labor is at a nadir.  How do you propose to change that?  Appropriate the capital of those that have it?  Spend it on Solyndra?  That is just shuffling pockets using the threat of violence by the state and actually results in capital misallocation which on the scale it is happening currently will impverish everybody in the aggregate, including the 99% (of which I am a member aspiring to get to the 1%).  A form of thuggery.  Why do you suppose the calculus on the part of business people has shifted to favor automation or outsourcing so much?  Well let me give you a hint.  It isnt because those mean old capitalists are out to screw labor for fun.  It is because politicians have made the ancillary costs of hiring actual human beings to do anything so freakishly outrageous (never mind such potential liabilities as litigation risk under whatever ridiculous theory an enterprising thief, i mean lawyer - and I am one - can cook up) that you would be mad to hire domestically rather than hire outside the jurisdiction of the US or Europe or replace people with hardware or software wherever possible.  Is there something wrong with that?  No there is not, though the result sucks.  Again your bitch should be not with the Hedgies or the current holders of capital, but with the morons who craft the legal landscape such that is makes automation and outsourcing more cost effective than hiring actual local people.

Anyway spent enough time on this, but for christs sake grow up.

Sat, 04/14/2012 - 12:46 | Link to Comment TMT
TMT's picture


I've tried many times to communicate some of your thoughts but have only resulted in name calling and juvenile rants. Some, and I stress some, people on here simply hate successful people. Just read through all the "eat the rich" posts on here.

Corruption is bad no doubt. But why is accumulating assets (wealth) such a bad thing?

Have a good weekend all.

Sat, 04/14/2012 - 08:54 | Link to Comment diwolf
diwolf's picture

If your investment horizon is long enough (trend following) this doesnt matter much. If you want to play with the sharks short term you get eaten. And the institution which funnels the most money from the middle/poor to the rich is the state. OWS (just had a look at the website) reminds me at socialist revolutions. They always ended much more badly for the masses.

Sat, 04/14/2012 - 13:48 | Link to Comment Diogenes
Diogenes's picture

You might also mention how hedge funds profit by buying control of companies by buying a small percentage of the stock, then sucking out all the cash and dumping the stock, in effect leaving the company penniless, deep in debt and ready to blow over in a stiff wind.

This is how you get rich while destroying jobs, pension funds, and your country's manufacturing base which in turn leaves the government with huge liabilities for social services and bailouts and a shrinking tax base.

Sun, 04/15/2012 - 02:32 | Link to Comment BorisTheBlade
BorisTheBlade's picture

The finance industry is a complete scam, designed to funnel money from the 99% investing public into the hands of the top .1%.\

Sure, some of you will make good money, but stastically, the rest of us will lose, and who is feeding off us?

Maybe it's time to call this market for what it is - a huge freaking casino. You don't go around complaining that you lost to casino (majority does), but neither do you go gamble your life savings there. So, participate in this market if you want to gamble and go somewhere else if you want to really preserve your wealth (i.e. PMs, small credit unions).

Sat, 04/14/2012 - 15:28 | Link to Comment mickeyman
mickeyman's picture

The squirrel in "Over the Hedge" would eat them for lunch.

Fri, 04/13/2012 - 20:16 | Link to Comment bigmikeO
bigmikeO's picture

I see dumb people

Sat, 04/14/2012 - 16:17 | Link to Comment Sokhmate
Sokhmate's picture

I see Vaginas

Fri, 04/13/2012 - 20:39 | Link to Comment rotagen
rotagen's picture

I see a stacked deck.  Dealer's advantage?... Las Vegas?

Fri, 04/13/2012 - 21:21 | Link to Comment illyia
illyia's picture

They want something from you. You can help them. They will not leave you alone until you help them.

Will you help them?


Mon, 04/16/2012 - 11:31 | Link to Comment futuretrader21
futuretrader21's picture

B Long Term investors...

Fri, 04/13/2012 - 18:37 | Link to Comment anynonmous
anynonmous's picture

Canada regulators impose tough rules on "dark" trades (sort of)

Fri, 04/13/2012 - 20:36 | Link to Comment 45north
45north's picture

The new rules allow exemptions for trades that have a value of more than C$100,000 ($100,300). 


seems totally unfair

Fri, 04/13/2012 - 23:48 | Link to Comment Bindar Dundat
Bindar Dundat's picture

"I'm being Eaten by a Boa Constrictor"


Oh No he's got my toe  ( little investor already screwed )

Oh Fiddle he's up to my middle  ( bit bigger -- get him with the new regs )

Oh Heck , He's up to my neck  ( your next little brokers )

Oh Dread , he's over my... ( All but Goldman and JP are dead )


The market is a freakin' Boa....

Fri, 04/13/2012 - 18:39 | Link to Comment Amish Hacker
Amish Hacker's picture

275 milliseconds? Damn, I missed the move again.

Fri, 04/13/2012 - 19:31 | Link to Comment centerline
centerline's picture

Discounting processing time, distance and everything else electronic, 275 milliseconds alone is fast to just react to a stimulus and press a button... LOL.

Fri, 04/13/2012 - 21:38 | Link to Comment Irrational number
Irrational number's picture

Sat, 04/14/2012 - 10:39 | Link to Comment buckethead
Fri, 04/13/2012 - 22:39 | Link to Comment green_dreams
green_dreams's picture

I'll have to settle with bobbing bobcat. 

Fri, 04/13/2012 - 21:11 | Link to Comment buckethead
buckethead's picture

In a nutshell.


Well done.

Fri, 04/13/2012 - 18:41 | Link to Comment MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

...annnd it's *

Fri, 04/20/2012 - 04:00 | Link to Comment MeelionDollerBogus
Fri, 04/13/2012 - 18:41 | Link to Comment Verum
Verum's picture

I enjoy reading the Nanex posts but don't understand most of it. Wish they would elaborate in layman's terms more often.

Fri, 04/13/2012 - 18:49 | Link to Comment Qa
Fri, 04/13/2012 - 18:50 | Link to Comment NotApplicable
NotApplicable's picture

Think signal to noise ratio. If you throw enough noise in the mix, the signal becomes unintelligible. But in this case, the bots are actually overwhelming the signal, replacing it with it's own fake one. On a human scale, it all happens so fast as to be invisible. Only the bots can see it in time to react, so it's bot vs. bot in the game of fleecing the handful of carbon entities still trading, as well as the slower bots who don't realize they're a few milliseconds behind.

Fri, 04/13/2012 - 18:41 | Link to Comment ekm
ekm's picture

Listening to Jesse Cook's melody Cancion Triste, one thing comes to mind:

It seems to me that LTRO and HFT are the same thing.

LTRO provides liquidty to european banks achieving non-liquidity.

HFT provides liquidity to stocks achieving non-liquidity.

Fri, 04/13/2012 - 18:44 | Link to Comment CURWAR2012
CURWAR2012's picture

Interesting observation, but who holds the bag? taxpayer and ?

Fri, 04/13/2012 - 18:47 | Link to Comment ekm
ekm's picture


Taxpayer holds the bag until he or she can't. At this point, taxpayer is totally shitted upon and there is nothing to squeeze from. Food prices are high, gas is high, no high paying jobs, old people are retiring and not spending.

I think time is coming that 2 or 3 primary dealers load up some trucks with elephant manure and start eating. Can't squeeze more from taxpayers.

Fri, 04/13/2012 - 18:51 | Link to Comment NotApplicable
NotApplicable's picture

Anybody with a fistful of fiat.

Fri, 04/13/2012 - 18:43 | Link to Comment Conman
Conman's picture

Mexico's IPC Index Plunges After 'Wrong Order'
Fri, 04/13/2012 - 18:50 | Link to Comment cheesewizz
cheesewizz's picture

so the large number of quotes vs. orders are the bots stuffing?

How do yo tell if it's a bot or human? Is it the speed?

I have been watching the sales on my trades and there are tons of 100 bid and ask sales moving across. What size do the bot trade?

Give us more details to the workings of the bots and how to spot the.....

Thanks cw


Fri, 04/13/2012 - 18:53 | Link to Comment Alex Kintner
Alex Kintner's picture

All in the blink of a robots eye. Skynet is pleased.

Fri, 04/13/2012 - 19:16 | Link to Comment ebworthen
ebworthen's picture

"Oooh the colors, such pretty colors, especially with these glasses. 

I just know these markets are going to the moon! 

Time to buy humans, buy-buy-buy!"


Fri, 04/13/2012 - 19:21 | Link to Comment TapperIsTicked
TapperIsTicked's picture

You saw colors.

My sphincter tightened.

Fri, 04/20/2012 - 03:55 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

forget skynet


Fri, 04/13/2012 - 19:17 | Link to Comment YesWeKahn
YesWeKahn's picture

When analysing complex problems, human brains are far more better than computers. But all the news are pre-fabricated by the very same people who control the trading robots, human investors, cough, cough, I meant, mupphets are doomed to fail.

Fri, 04/13/2012 - 19:36 | Link to Comment fuu
fuu's picture



NSDQ 22% trades/quotes

BOST 3% trades/quotes

PACF 35% trades/quotes

BATS 23% trades/quotes

CBOE 5% trades/quotes

EDGX 29% trades/quotes

EDGE 18% trades/quotes

BATY 2% trades/quotes

PHIL .47% trades/quotes


Fri, 04/13/2012 - 19:38 | Link to Comment schatzi
schatzi's picture

Wouldn't placing time limits on trades be a great idea? Say for example every brokerage can only trade one stock/commodity/etc. per second.

Fri, 04/13/2012 - 19:54 | Link to Comment scatterbrains
scatterbrains's picture

time limits would be the ruin of these crooks.  If the houses agree to kick back and forth a couple millions shares a day using HFT to drive the price of AAPL to the moon and at the end of the day swap each other back to break even while having pushed AAPL up 20 points and in so doing loading positions for the bear raid why would they want time delays ? Any one who buys into this price mirage is like food for the wood chipper... go ahead stick your head in there if you like the blades arn't sharp.



Fri, 04/13/2012 - 19:40 | Link to Comment YesWeKahn
YesWeKahn's picture

Is this so called random walk?

Fri, 04/13/2012 - 19:44 | Link to Comment non_anon
non_anon's picture

robots, bitchez!

Are We Giving Robots Too Much Power?

Fri, 04/13/2012 - 19:44 | Link to Comment The Navigator
The Navigator's picture

For the average investor, we are the 99% and the machines are the 1% - can't beat 'em in that casino.

Fri, 04/13/2012 - 19:51 | Link to Comment babylon15
babylon15's picture

So who made money doing what trades?

Fri, 04/13/2012 - 20:11 | Link to Comment 10044
10044's picture

Pffff, goldman sachs

Fri, 04/13/2012 - 20:06 | Link to Comment divedivedive
divedivedive's picture

I would appreciate it if someone could explain the true function of Intermarket Sweep orders.

Early this week I placed an order to sell 500 shares of a popular ETF. I don't remember the specific price but let's say the 'top of book' was xx.43 / xx.47. I put my limit in at xx.46.

I got a partial fill of 20 shares very quickly, but it took at least a minute for my 480 shares to show up in the level 2 and then it sat there. I watched at keast 12-20 trades execute at my ask with my order sitting at the top of the book. 

I called the broker and said what's up. They said all the orders I saw executed in the Time and Sales window were Intermarket Sweep orders. Finaly when the bid rose to my ask the trade executed. This is a new broker for me (a very large one). I've never seen this happen with my older broker. Is it that my older broker was probably placing my trades as 'sweep' orders to get them executed faster ?


Fri, 04/13/2012 - 20:25 | Link to Comment ebworthen
Fri, 04/13/2012 - 20:07 | Link to Comment pleseus
pleseus's picture

Stock market dark matter. Doesn't mean shit to me. I read the USA Today, drive a truck and shop at Walmart. All I know is risk on/risk off.

Fri, 04/13/2012 - 20:16 | Link to Comment Amish Hacker
Amish Hacker's picture

Go to the head of the class.

Fri, 04/13/2012 - 20:25 | Link to Comment Yen Cross
Yen Cross's picture

 Man = ( ) Event Horizon<>

Sat, 04/14/2012 - 00:10 | Link to Comment Arkadaba
Arkadaba's picture

Quickly looking at the first chart I saw "Even bar" - I knew I was not processing correctly. 

Fri, 04/13/2012 - 21:04 | Link to Comment q99x2
q99x2's picture


Fri, 04/13/2012 - 21:48 | Link to Comment jack stephan
jack stephan's picture

That Aldous Huxley comment was good, thats why I like reading here.  Everyone should always smell a rat, how high is the leverage now??  40 percent or more now, slowly dwarfing a few years ago.  How many fucking trillions???????????

Well hit quadrillion soon.  What a silly reality, I guess its been like this a few times before.

Fri, 04/13/2012 - 23:18 | Link to Comment Yen Cross
Yen Cross's picture

Easy there "Artemus Gordon" We are " Lip Synching" the Central banking system!

  The { N} is earned!

Fri, 04/13/2012 - 22:42 | Link to Comment Atomizer
Atomizer's picture

23 January 2012 by Patrick Byrne


Read the comment section. Muppet Stream Media <crickets>


Fri, 04/13/2012 - 23:08 | Link to Comment Yen Cross
Yen Cross's picture

Sublime? Tyler posted it!  swap lines

Fri, 04/13/2012 - 23:28 | Link to Comment SillySalesmanQu...
SillySalesmanQuestion's picture

I can't see, hear, react or trade at warp speed.

Fri, 04/20/2012 - 01:43 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

You don't need warp speed. So long as you can set bids and asks in your orders that they can see, you can lead them on. You can also let others lead them on while your order, hopefully in a minority (someone can check, in theory you can too) is ready to actually interact profitably with any one of the HFT's. their time-scope is NOT minutes to weeks and if yours is you can get a good deal heading into those minutes to weeks. They can't look at every scope at once because the algorithms aren't the same for both time-scales - they are in fact conflicting.

The HFT's can serve but ONE master at a time - the short-term nano-second profiteering OR the longer-term multi-week strategies.

Sat, 04/14/2012 - 00:42 | Link to Comment Money Squid
Money Squid's picture

From this article I conclude Cognitive Dissonance works at Nanex

Sat, 04/14/2012 - 03:10 | Link to Comment connda
connda's picture

Skynet is taking over.  Skynet will succeed.  Useless eaters must be terminated. 

Sat, 04/14/2012 - 04:12 | Link to Comment Motorhead
Motorhead's picture

Charts, bitchez, even fucked up ones!

Sat, 04/14/2012 - 06:17 | Link to Comment sockratte
sockratte's picture

anyone knows a hft provider? dumbasses think they have an advantage with hft...

Sat, 04/14/2012 - 08:32 | Link to Comment orangegeek
orangegeek's picture

What the heck, let the Cylons run things.  And when they take over mother earth, we'll just jump aboard our Battlestar Galactica and hang out somewhere else.


Artificial intelligence is permeating many aspects of our lives, but they are only as good as the humans that develop their thinking.  These AI systems do respond quicker, but if the decision is wrong, speed won't help.


Remember the May 2010 10 minute market collapse?  Glitch my a**!!  HFT making decisions with no overide or kill switch.


Here's a weekly - the top of this collapse is noted at the (W) Z wave.

Sun, 04/15/2012 - 08:15 | Link to Comment ebworthen
ebworthen's picture

Nice chart, thanks.

Fri, 04/20/2012 - 01:40 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

These AI systems do respond quicker, but if the decision is wrong, speed won't help.

Remember the May 2010 10 minute market collapse?  Glitch my a**!!  HFT making decisions with no overide or kill switch.

Who says the machines were wrong?

The computers are programmed to profit - NOT TO LIE.

It's HFT-rigging that gets max # transactions & tries to get other machines to guess wrong.

It's HUMAN-RIGGING that lies & defrauds balance sheets and prints money - the AI's are not in charge of that. What do you think is doing more harm to human share-holders?

Sat, 04/14/2012 - 09:35 | Link to Comment crawl
crawl's picture

Another Nasdaq stock being manipulated?  Say it ain't so! 

Professional thieves at work, using bots.  And people wonder why trading volume is on the decline.

Sat, 04/14/2012 - 10:02 | Link to Comment tricky rick
tricky rick's picture

When the hair goes up on the back of your neck...  fight or flight?  Or, let a reasonable lawyer sooth your ruffled feathers  (little red riding hood)

who's for dinner???    filet of fool who fell for it...

It's in your hands... the only thing that IS yours!


Sat, 04/14/2012 - 11:16 | Link to Comment Money 4 Nothing
Money 4 Nothing's picture

This is probably why all the retail traders went buh bye along time ago.

This trading day brought to you by Hasbro Etch-A-Sketch.

Sat, 04/14/2012 - 16:40 | Link to Comment WmMcK
WmMcK's picture

Mine says Ohio Art (pre-China). But I've upgraded to using Spirograph.

Sat, 04/14/2012 - 11:41 | Link to Comment Crash2012
Crash2012's picture

Let's go back to trading stocks in fractions!

With .25 cent increments, 25x FEWER steps would be possible than happen with .01 increments!  At a minimum, this would result in 25x FEWER trades!  I suspect that the number of trades would be even lower than that as there would be less bot-to-bot activity as well!


Sat, 04/14/2012 - 12:18 | Link to Comment GrinandBearit
GrinandBearit's picture

A rigged game.  Don't feed the hole.  Don't trade... Don't contribute to retirement accounts... Don't keep money in bank or brokerage accounts.

As we near the end, things will get become increasingly absurd and bizarre. 

We are almost at the end... I can't wait to see it all crash and burn.

Sun, 04/15/2012 - 08:14 | Link to Comment ebworthen
ebworthen's picture

Ultimately, the machine will choose a 1 or a 0 (binary).

They have to have another machine to take the 1 or the 0 they want to buy or sell.

If all the machines want to sell their 1's and not buy any 0's you will have the mother of all flash crashes.

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