27 Aug, 2009
There are two HFT-related articles this morning:
First, an article showcasing Getco LLC: http://online.wsj.com/article/SB125133123046162191.html
Second, an article by former POSIT founders defending Flash Trading: http://online.wsj.com/article/SB10001424052970203706604574374431720968204.html
I’ll start with the second article. It likens Flash Trading to offering to sell your house to your neighbor before you list it. That analogy is wrong. The correct real estate analogy would [...]
21 Aug, 2009
Volume continues to be concentrated in just a few names. Today, in a universe of over 5000 stocks in the U.S. equity market, only 4 stocks contributed 20% of the volume.
Citigroup (C), Bank of America (BAC), Fannie Mae (FNM) and Freddie Mac (FRE) traded a total of 2.041 billion shares. Overall volume in the U.S [...]
14 Aug, 2009
I believe that it is extremely wise and helpful for all investors to ask questions about a very murky and little-understood style of trading, lately labeled HFT. Dark pools? Predatory? How so? Who plays? What’s the angle? We make no value judgement in general on investing styles, but we do ask questions when one group [...]
07 Aug, 2009
So, Goldman is on track to report record trading revenue, enabling it to boost its compensation 64% from last year. See Christine Harper’s Bloomberg July 9th blurb. Where is this trading revenue from? You know the answer! HFT. These automated programs detect institutional volume and footsteps, front run the perceived footprint, and collect rebates all [...]
07 Aug, 2009
The point is $25.80. Either there is a monster buyer at this level or the HFT are rallying and defending this level. Either way, be careful if either one goes away.
05 Aug, 2009
Man, slow days in the market are dangerous for idle and bizarre minds (mine). The more I dig, the more questions I come up with.
Today I am questioning the whole rebate trading game (payment for order flow by for-profit entities and exchanges). Some of these exchanges actually have accelerated rebate programs. Instead of paying their [...]
03 Aug, 2009
And so it begins. The HFT crowd has launched their defense. As we all know, the HFT crowd is a secretive bunch so their defense is being launched though various surrogates who have their own self interest at hand. First, there are the brokers. We have seen many of these “client” letters from brokers over [...]