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Are we against HFT?

28

July, 2009

In recent weeks we have had numerous conversations with academia, media, mutual fund traders, hedge fund traders, high frequency proponents, as well as other brokerage firms. Sometimes little fights and arguments take away the importance of our biggest points and objections. This is probably true in life in general, incidentally, but for the sake of the industry we love, we would like to wake up today and repeat a few important points.

1) We have a history of being technology able. We have a history of being nimble. And we have a history of having our goals completely aligned with those of our customers. We seek to source liquidity for our customers wherever it is located, and to do so with no conflicts with their interests.

2) We are not against high frequency trading, any more than we are against value investing, momentum investing, GARP investing, or even low frequency trading. We believe in capitalism and the marketplace’s wisdom to allocate capital and choose its participants. Our job has been, and always will be, to play and work for our clients in an arena that evolves naturally.

3) We take issue with a system where one type of participant is catered to at the expense of other stakeholders, unfairly. We take issue with order types and arrangements that favor and attract one type of player AT THE EXPENSE OF other players. We would like a market where our regulators insure that everyone has access to the same liquidity, no matter where their “servers” are located. We would like a market where one group is no’t shown another group’s orders and intentions before they even hit the general marketplace. Is this not common sense?

We do not care that someone has a supercomputer that can shoot an order to the market faster than everyone else. That is their right to make such investments in technology. We do care that, because such a player is profitable to our newly for-profit exchanges, they get privileges above what a mutual fund, hedge fund, retirement fund, or retail investor gets.

3 Responses to “Are we against HFT?”

  1. thstart
    avatar

    Your paper intrigued me and I started looking for information from the sources: Comments on SEC Rulings and Proposals, Congress Testimonies. It is very time consuming but worth the efforts.

    Here is what I found recently:

    New “Flash” and BOLT functionality – Nasdaq, BATS Preferential Member Treatment by Holding Orders for 3 seconds
    Of BOLTs and Flashes

    http://blog.tradersheadstart.com/2009/07/new-flash-and-
    bolt-functionality-nasdaq.html

    Also we are publishing some original research directly from European sources in original languages.


  2. thstart
    avatar

    Your paper intrigued me and I started looking for information from the sources: Comments on SEC Rulings and Proposals, Congress Testimonies. It is very time consuming but worth the efforts.

    Here is what I found recently:

    New “Flash” and BOLT functionality – Nasdaq, BATS Preferential Member Treatment by Holding Orders for 3 seconds
    Of BOLTs and Flashes

    http://blog.tradersheadstart.com/2009/07/new-flash-and-bolt-functionality-nasdaq.html

    Also we are publishing some original research directly from European sources in original languages.


  3. Penny Stock Picks
    avatar

    Penny Stock Picks…

    Great job with the info. How did you find it? Please let me know….


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