High Frequency Trading
“Things always become obvious after the fact” – Nassim Nicholas Taleb
“Facts do not cease to exist because they are ignored.” – Aldous Huxley
"Democratic presidential candidate Bernie Sanders wants to take from the rich in order to make public college tuition-free for everyone else. On Tuesday, the Vermont senator will hold a press conference in the nation's capital at which he will introduce a plan to use a so-called Robin Hood tax on stock transactions to fund tuition at four-year public colleges and universities," Bloomberg reports.
"I think we have to blame central bank intervention. How can we not? It’s all around the world. They’re setting interest rates at a ridiculous level. Quantitative easing is distorting all sorts of prices of assets. How do you price things anymore when you have such a giant manipulator out there?"
The week that passed has been nothing short of a roller coaster ride for many nervous investors. And for some: a realization that the once hyped, hawked, and levered Billion dollar babies can indeed “come off the rails.” Turning the once joyride into something more in common with a free fall into the abyss. However, you’re told not too worry: For if you loved the ride when the prices were higher, then surely you should be ecstatic to “ride again” since the new ticket prices are clearly “on sale!”
If the DOJ and CFTC is going to be consistent, then they have to indict the entire financial community from the CME, Exchanges, Brokers, Institutions, Investment Banks, Hedge Funds, Management Funds and High Frequency Trading Firms.
October 15th, 2014 wasn`t a market crash!
- FUTURES TRADER ARRESTED FOR ALLEGED ROLE IN 2010 FLASH CRASH
- FUTURES TRADER CHARGED WITH ILLEGALLY MANIPULATING STOCK MKT
- SARAO HAS BEEN CHARGED WITH COMMODITIES, WIRE FRAUD: GOELMAN
- SARAO WAS ARRESTED AT HIS HOME IN LONDON TODAY, GOELMAN SAYS
- CFTC FILES CIVIL CASE AGAINST NAVINDER SINGH SARAO
Being grateful boosts your happiness. Here are ten sickening wonderful things we're grateful for in the new normal...
"We Win More Than We Lose"
"In some instances, malfunctioning algorithms have interfered with market functioning, inundating trading venues with message traffic or creating sharp, short-lived spikes in prices as a result of other algorithms responding to the initial erroneous order flow."... "If liquidity is as bad as it is now, what’s going to happen when things really get adverse?” said Richard Schlanger, who co-manages about $30 billion in bonds as vice president at Pioneer Investments in Boston.
In retrospect, we almost feel bad for Gregg: after all in the new paranormal, in which the market is manipulated, fragmented and broken from the top (central banks) all the way to the very bottom (HFTs) with the sole purpose of pushing it ever higher in a futile attempt to restore confidence and retail investor participation in what is so clearly a rigged casino it is not easy pretending everything is fine when everything is on the verge of total collapse at any given (nano)second, and where the only recourse to coordinated selling is for the markets to break. Literally.
The question on everyone's lips: which asset class was responsible for Virtu's trading perfection for yet another year. It wasn't stocks because adding across the firm's America, EMEA and APAX equity product lines, Virtu revenues actually declined, from $201 million in 2013 to $195 million in 2014. It also wasn't commodities, where revenue dropped by almost $2 million in 2014 to $93.1 million.The answer is...
Back in 2009, when aside from a few insiders, nobody had heard of HFT, Zero Hedge launched its crusade to expose the algorithmic scourge that has since then caused an equity, treasury and now US Dollar flash crash, and has been the subject of a Michael Lewis bestseller and resulted in countless market halts and failures. More importantly, there is now roughly 50 pages of just bibliography citing the evidence-based, academic research that has shown just how pervsavibely, maliciously and premeditatedly HFTs manipulate, destabilize, impair and otherwise destroy every single market in which they participate.
Suddenly the narrative that “everything is awesome” is showing to not be as “awesome” as it was first proclaimed. Merely a few months have passed since the ending of QE and praises of awesomeness everywhere are morphing into questions more akin to “Oh no: not again!” And with that we are now watching those who pushed, pulled, and levitated that narrative scramble desperately to push another narrative back onto the stage that worked so many times before: “Every sell off over the last 6 years has shown to be a profitable buying opportunity.” i.e., Just buy the dip (JBTFD). Yet it would seem these dips; are far different.
The beginning of the end of high frequency trading has arrived, and it has done so in a most unexpected fashion: with an HFT turning on other HFTs and revealing on the record, for the entire world to see, just how truly parasitic, manipulative and "market-rigging" the algorithms truly are.