Market is Rigged

Water Cooler
#21

Legislation of high frequency trading is driven by fears of a future “flash crash”, not by the lost sub pennies that no one notices. In fact, it might be the case that the cost of regulation would outweigh the small inefficiencies caused by high frequency traders.

#22

WSJ just flashed a banner on my phone, saying the FBI was investigating HFT, and whether it’s a violation of insider trading.

#23

He’s also white.

#24

The industry strikes back:

http://www.forbes.com/sites/timworstall/2014/03/31/michael-lewis-is-entirely-wrong-about-high-frequency-trading-hitting-the-little-guy/

#25

Great post Bchad, well said.

I couldn’t understand the reasoning behind the quote. Anybody know the reasoning behind the quote?

#26

So…they’re smarter market makers? if they can conceivably figure out a way to ban this, which is improbable, why wouldn’t traditional market makers simple utilize some of the same tools? Other than forcing simultaenous distribution of information, this just seems like a hopeless luddite strategy with tons of unintended consequences?

#27

http://www.cbssports.com/nhl/eye-on-hockey/24510270/owner-of-panthers-trading-company-could-face-scrutiny-with-new-book

HFT spills over into the sports world

#28

FBI agents and US attorneys blustering about investigating high frequency trading seems like it is missing the fundamental issue. If the incentives are producing systemically damaging effects (like bchad’s point about liquidity drying up during crises), then figure out what incentives would resolve those issues and push for regulations that fix the problems.

#29

^+1.

the time for ideological regulations are gone.

i’m more of a incentive compromise person.

#30

Michael Lewis was on the Charlie Rose show last night for the hour. Is it me, or does he always wear the same thing when he is interviewed?

#31

An interesting read on this

http://mobile.nytimes.com/2014/04/06/magazine/flash-boys-michael-lewis.html?_r=0&referrer=

#32

So, Trader realized that his job is in danger and started panicking.

The end

#33

Good read. 21st century front running. Heard the argument that HFT was just fast market making. Not quite.

If something can be done, it will be done.

#34

http://www.cnbc.com/id/101551570 Thoughts? I’m small fry and i’ve noticed the book move strangly against me. Took mental note, but, like many others, just carried on. Maybe not technical definition of front running, not using client’s information, but it does appear traders are fronting orders. Call it what you like.