bkballa

spierce Wrote:
——————————————————-
Somehow the markets functioned well before HFT
This is abject nonsense. The markets have never been perfect nor even well-behaved.
All of the recent innovation has been, for the most part, an improvement for the retail investor. Penny quotes, electronic brokerages, ETFs, etc…
Perhaps you’re yearning for the day when there was a $100 commission to trade IBM with a 25c spread?

hassan

so with that said, there is no confusion anymore right?….

RealEstate_CFA

FrankArabia Wrote:
——————————————————-
so with that said, there is no confusion anymore right?….
…I’ve also heard it classified as rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars.

Rasec

LPoulin133 Wrote:
——————————————————-
FrankArabia Wrote:
————————————————–
—–
  so with that said, there is no confusion anymore
right?….

…I’ve also heard it classified as rich enough to
have your own jet. Rich enough not to waste time.
Fifty, a hundred million dollars.
A player.

bbtomato

I would add that liquidity can be regime-dependent. For instance, if the market is declining sharply, then people may be unsure of what your asset is worth and in order to offload it you would need to accept an even larger decline.

malbec

justin88 Wrote:
——————————————————-
spierce Wrote:
————————————————–
—–
  Somehow the markets functioned well before HFT

This is abject nonsense. The markets have never
been perfect nor even well-behaved.

All of the recent innovation has been, for the
most part, an improvement for the retail investor.
Penny quotes, electronic brokerages, ETFs,
etc…

Perhaps you’re yearning for the day when there was
a $100 commission to trade IBM with a 25c spread?
you know what is abject nonsense? The idea that some bank or fund can utterly front-run all clients and every other market participant because they have a super computer connected to an uber internet pipe and they can quote stuff the sh!t out of a stock to pop limits. or that this “liqudity” can dissapear in a milisecond and cause the entire market to crash within that period. Or that they can flash-crash single stocks at the push of a button.
Then you attempt to say that without HFT we’d go back to the $100 commission with spreads at 25c. sorry, but that’s just a ridiculous argument. If the algos were removed we wouldn’t all of the sudden revert. HFT has done nothing at all to help out retail investors and has merely cost them millions if not tens of billions.
It’s pure market manipulation and should be illegal.

anshultongia

I never said that “without HFT we’d go back to the $100 with spreads at 25c”. I was merely pointing out that the bygone days you yearn for were far worse than what we have now, particularly for retail investors. A lot of the innovation we’ve had has been beneficial for retail investors, including IMO, HFT.
HFT wouldn’t exist unless there was already a market inefficiency. HFT in essence is providing small amounts of liquidity for certain names, on certain venues, at certain times. Retail investors, while not getting perfect execution, are getting better execution, partially due to HFT, than ten years ago. (Very few even paid attention to execution at all ten years ago.)
Perhaps your lolrage is better directed toward the fragmentation of the markets than HFT? The reason SS flash crashes happen is because liquidity is fragmented across dozens of trading venues, many of which are trading the exact same/fungible things, but the price on one of those venues temporarily plummets/rips because someone routed an outsized amount of flow to that venue relative to its liquidity.

CPATrader

spierce Wrote:
——————————————————-
you know what is abject nonsense? The idea that
some bank or fund can utterly front-run all
clients and every other market participant because
they have a super computer connected to an uber
internet pipe and they can quote stuff the sh!t
out of a stock to pop limits.
Front-running isn’t the same thing as HFT. You can criticize front-running without criticizing HFT.
or that this
“liqudity” can dissapear in a milisecond and cause
the entire market to crash within that period. Or
that they can flash-crash single stocks at the
push of a button.
If liquidity disappears and no one trades, then the market won’t fall. It takes people wanting to sell more than buy when liquidity dries up (no one seems to are about liquidity drying up and the market rising 100%, only falling 100%). I’m sorry, but I don’t have much sympathy for the panic-sellers. Anyway, if there are some prints -20% down, that doesn’t mean that volume-weighted prices for the day really changed much.
Then you attempt to say that without HFT we’d go
back to the $100 commission with spreads at 25c.
sorry, but that’s just a ridiculous argument.
I think the decline in commission has more to do with regulatory changes than the narrowing of spreads.
HFT has done nothing at all to
help out retail investors and has merely cost them
millions if not tens of billions.
HFT would have to steal more money than the narrowing of the spreads would have saved them.

rkapoor

jmh530 Wrote:
——————————————————-
Front-running isn’t the same thing as HFT. You can
criticize front-running without criticizing HFT.
But you CAN criticize both. Sure, there can be front running without HFT, but HFT does enable faster front running.

If liquidity disappears and no one trades, then
the market won’t fall. It takes people wanting to
sell more than buy when liquidity dries up (no one
seems to are about liquidity drying up and the
market rising 100%, only falling 100%). I’m sorry,
but I don’t have much sympathy for the
panic-sellers. Anyway, if there are some prints
-20% down, that doesn’t mean that volume-weighted
prices for the day really changed much.

And what about stop-loss orders that are triggered. ZH has some good graphs of the volume pings that drop prices precipitously and the obvious market manipulation.
I think the decline in commission has more to do
with regulatory changes than the narrowing of
spreads.

  HFT has done nothing at all to
  help out retail investors and has merely cost
them
  millions if not tens of billions.

HFT would have to steal more money than the
narrowing of the spreads would have saved them.
I agree 100%, the answer is obvious.

dkishore1

spierce - I agree with you in principle.
Though, when talking about “frontrunning”, there should be a distinction between frontrunning, which is a broker specific problem, and simply trading. It does matter who’s doing it imo.