The three HFT horsemen are C, BAC and CIT. These three stocks traded 860 million shares today which is 10% of all US Equity volume. Think about that – 3 stocks in a universe of over 5000 U.S. stocks represented 10% of the volume. How could this be? Look at the intraday chart of all three of these stocks and you will see a something in common: an early morning move followed by a flatline with a very tight range (around .05). Meanwhile, while these stocks were flatlining the market was heading higher. The S&P 500 gained around 10 points in the afternoon (or 1%) but these 3 stocks did not move. There was a constant bid to these stocks yet anytime they wanted to lift there seemed to be a constant offer just a few pennies higher. This is what HFT looks like. The HFT’s made a killing in these 3 names today – in addition to the .01-.02 spread, they collected about .005/share in liquidity rebates. Not a bad day for a supercomputer.
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So in round numberes –
On the .005 /share – that is 4.3 Million $$
and on the .01/share that is 8.6 Million $$
But let us say that on the buy/sell they broke even – so they did not really make anything since they had a total wash out of their trades – so profit on the Trades – a big fat zero —
But on their Trading Volume – they still made 4.3 Million $$$ – -
How is that fair to anyone other than the Exchance that then gets to seel the trading history to others and since this is 10% more volume . . .
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Penny Stock Picks…
Great job with the info. How did you find it? Please let me know….