malbec

justin88 Wrote:
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spierce Wrote:
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  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.

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.

Rasec

LPoulin133 Wrote:
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FrankArabia Wrote:
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  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.

RealEstate_CFA

FrankArabia Wrote:
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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.

hassan

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

bkballa

spierce Wrote:
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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?

ayaz_mahmud369

spierce Wrote:
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The HFTs don’t provide anything and, in fact, take it since regular traders do not have the ability to micro trade and front-run those traders, taking profits from ordinary people.
Somehow the markets functioned well before HFT, I hope they outlaw it soon. The first step was the SEC requesting the algos.
Everyone does have the ability, perhaps not the means. Much like a seat used to cost a lot of money to lease - they are just a modern day version of the specialists and pit traders of old. This will always be a part of the market imo.

kingstongal

spierce Wrote:
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The first step was the
SEC requesting the algos.
Step 2: SEC hiring people that understand the algos.

ap0258

The HFTs don’t provide anything and, in fact, take it since regular traders do not have the ability to micro trade and front-run those traders, taking profits from ordinary people.
Somehow the markets functioned well before HFT, I hope they outlaw it soon. The first step was the SEC requesting the algos.

hassan

bchadwick Wrote:
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But there are plenty of other times when people
talk about providing liquidity that doesn’t really
seem to fit into this view, and I wonder what I’m
missing. HFT firms, for example, talk about
“providing liquidity,” but in fact, that liquidity
can disappear instantaneously, so are they really
providing it? How are they making money, other
than, perhaps, from each other.
When the firms are trading, they’re providing liquidity. When they’re not trading, they’re not providing liquidity. Most of them are under no obligation to trade constantly, and if they do turn off their trading, you would see a measurable decrease in liquidity.
Providing liquidity is generally a profitable endeavor, though not without risk. For instance, you can’t take one side of a trade forever and just build inventory. So, you might say you’re willing to take on a position up to some limit, whether that limit is based on average daily volume or % of the float or some other metric.