My partners frequently poke fun at me (ok there is a long line of folks doing this…), specifically for thinking too deeply about a topic, and expressing an idea with too much detail. I would like to get real simple here. High Frequency Trading is  proprietary computer trading with the goal of collecting rebates, and/or detecting real order flow (ie. institutional flow) and frontrunning it and making pennies. What bothers me? Two things: First, whether the market is trading at a 16 P/E,  or a 22 P/E, or a 30P/E… this is decided by 30% of the volume in the (more…)

CIT had some awful news out this morning.  The stock was halted right after the opening and once reopened it tanked almost 50%.  But then a magical thing happened, the stock traded back to $1 from a low of $0.75.  What is so magical about $1?  Any stock that trades under $1 is not eligible for a liquidty rebate from the exchanges/ecn’s.  The cost to trade sub $1 stocks is FREE but you don’t get the rebate.  But if the stock gets over $1, the the liquidity rebates which could be as high as $.003/share kick in.  So, it appears (more…)

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