• Steve H. Hanke
    02/11/2016 - 16:08
    The burgeoning literature contains a great deal of hype, which validates the 95% Rule: 95% of what is written about economics and finance is either wrong or irrelevant.

High Frequency Trading

High Frequency Trading
Tyler Durden's picture

"People In The Market For Many, Many Years Have Been Replaced By An Algorithm"





“I don’t think there’s a whole lot from my generation that are still in the industry"..."The business has to be downsized,” said Keith Underwood, a foreign-exchange consultant who ended a 25-year trading career, including at Lloyds Banking Group Plc, in 2014. But it’s not easy “for people who have been in a market for many, many years to see that they’ve been replaced by an algorithm.”

 
Tyler Durden's picture

One Of The Biggest High Frequenecy Traders Warns Of Potential Market "Catastrophe"





The head of one of the biggest high-frequency trading companies has warned that there are several faultlines in the structure of increasingly electronic, automated financial markets that could lead to a “catastrophe” in the long run. "We’re creeping in the right direction, but unless we proactively address these issues, sometime in the next several decades we are going to experience a catastrophe due to runaway computerised trading,” Tower Research's Mark Gorton said.

 
Tyler Durden's picture

Did A Central Banker Just Margin Call All Other Central Banks' Credibility?





Did the BOJ’s out-of-the-blue reversal on its monetary stance which was refuted just weeks prior by Mr. Kuroda himself take place because after listening to the arguments, suggestions, as well as concerns, from the participants at Davos he concluded much like what the movie “Margin Call” depicted: It was all about to unravel? And if so: is this him deciding to be “first” and considered it his only choice?

 
EconMatters's picture

Investment Banks Share the Same Trading Algo Code





We used to have notions of ‘proprietary programmed code’ but the Investment Banks learned that they could make their life a lot easier by working together instead of cross purposes.

 
Tyler Durden's picture

As Wall Street Vultures Circle The Next Junk Bond Fund Casualty, A Familiar Name Emerges





And so Wall Street has set its sights on the next junk bond fund casualty, a name which is well-known to most equity market participants: none other than Waddell and Reed (WDR), the fund which rose to infamy in the aftermath of the May 2010 Flash Crash, after it was initially blamed by the SEC as the culprit behind the Dow's 1000 point crash...

 
Tyler Durden's picture

It's "Red Or Black" For Those Still Foolish Enough To Play





There’s an old adage among veteran stock traders that goes something like his, “If I told you the news before it were made public – it’s still a 50/50 bet you would guess the market’s reaction correctly.” That was when the markets had some resemblance of normalcy. Today, normalcy has been replaced with sheer lunacy as to the speculation and interpretations for where these markets go from here.

 
Tyler Durden's picture

Nomi Prins: Crony Capitalism & Corruption - An Entirely Rigged Political-Financial System





The notion of free markets, mechanisms where buyers and sellers can meet to exchange securities or various kinds of goods, in which each participant has access to the same information, is a fallacy. Transparency in trading across global financial markets is a fallacy. Not only are markets rigged by, and for, the biggest players, so is the entire political-financial system.

 
smartknowledgeu's picture

The Problem With Education Today, by JS Kim





The institutional academic system is broken. We need less systemic, traditional education that only provides knowledge of low utility and more alternative education that provides the right high-utility knowledge to thrive during today's global currency wars.

 
Tyler Durden's picture

New Poll Shows 60% Of Americans Think Hillary Clinton Is Untrustworthy & Dishonest





The real interesting part of the latest Quinnipiac University National Poll, is not the fact that 60% of Americans think Hillary Clinton is dishonest, but that 40% of Americans don’t.

 
Tyler Durden's picture

China Arrests Three High Frequency Traders For "Destabilizing The Market And Profiting From Volatility"





As the crackdown against Zexi was taking place, Shanghai police also arrested 3 suspects as they cracked a case of stock futures price manipulation involving over 11.3 billion yuan (US$1.8 billion), police said yesterday in a statement. According to Shanghai Daily, Yishidun, a commercial company registered in Jiangsu Province’s Zhangjiagang City in 2012, was found to use an illegal stock futures trading software to destabilize the market and profit from volatility.

 
Tyler Durden's picture

Who Will Be Blamed?





"... you can bet that whenever an earthquake like this happens, especially when it’s triggered by two invisible tectonic plates like put gamma and call gamma and then cascades through arcane geologies like options expiration dates and ETF pricing software, both the media and self-interested parties will begin a mad rush to find someone or something a tad bit more obvious to blame. So you end up getting every investment process that uses a computer – from high frequency trading to risk parity allocations to derivative hedges – all lumped together in one big shotgun blast"

 
Tyler Durden's picture

Ignorance Is Not Bliss





You’re doing yourself a disservice if you don't have a basic working knowledge of what, say, a volatility surface means. We're not saying that we all have to become volatility traders to survive in the market jungle today, any more than we all have to become game theorists to avoid being the sucker at the Fed’s communication policy table. And if you want to remove yourself as much as possible from the machines, then find a niche in the public markets where dark strategies have little sway. Muni bonds, say, or MLPs. The machines will find you eventually, but for now you’re safe. But if you’re a traditional investor whose sandbox includes big markets like the S&P 500, then you’re only disadvantaging yourself by ignoring this stuff. Ignorance is not bliss...

 
Tyler Durden's picture

Ignore The Media Bullsh!t - Retail Implosion Proves We Are In Recession





The fact of the matter is that year over year retail sales at these levels only happen during recessions. It’s really that simple. Without the crutch of subprime auto loans and student loan debt being spent by pretend University of Phoenix students on iGadgets, fitbits, hookers and blow, this economy would already be in free fall. Look no further than what happened to Wal-Mart today for confirmation we are in the midst of a worldwide recession, if not depression. The only people who refuse to acknowledge recession reality are the Wall Street hucksters, looking to fleece a few more muppets before their party is over. Propaganda and lies can’t stop this recession.

 
Tyler Durden's picture

It A "Liquidity Mirage": New York Fed Finally Grasps How Broken The Market Is Due To HFTs





Goodbye to "fat fingers" being blamed for flash crashes, and welcome to the Heisenberg uncertainty market: you can have your 1 cent bid/ask spreads... but you can't have any real market depth at the same time.

 
Tyler Durden's picture

Spoofer Complains About Spoofing, Is Ignored, Starts Spoofing, Gets Busted





This is the story of a veteran NYSE specialist who noticed manipulation in the NYSE market open Imbalance, loudly complained to the NYSE, was ignored, then decided to profit from said manipulation himself... and got busted.  And that's where the story begins...

 
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