05
Oct, 2010
05
Oct, 2010
Depends Where You Are Born
As self-fancied philosophers, we at Themis can’t help but note how different one’s lot in life can be, depending on where they are born.
For example, in France ex-SocGen trader Kerviel gets a rather harsh sentence for Breach of Trust and Computer Abuse. Jail time and a $6.7 billion fine. That fine is so big, that even California’s raising its pensions assumptions to 15% annual return for 50 years couldn’t fund it.
In Sweden, such a trader would also get a fine, albeit smaller, and jail time, but only if he practiced Computer Abuse against an HFT firm’s algorithm (ironic isn’t it? See this story: Swedish Traders Arrested for Cracking Timber Hill Algorithm).
In the USA, the results are different. If you are a trader practicing Computer Abuse and Breach of Trust, you will 1) earn billions of dollars, 2) have “perfect days” for years in a row, 3) have certain SEC Commissioners (not Schapiro) tear up and scream Hallelujah every time your name is mentioned, and 4) have Senators write letters to pressure regulators after your lobby pads their re-election coffers. In the USA, should your Computer Abuse and Breach of Trust cause Flash Crashes, you will have an army of PR folks to blame a Mutual Fund on your behalf. America Baby!
Later today we will highlight another issue we have picked from the SEC’s report, in addition to the two we have already highlighted: 1) HFT trading with the trend, and not providing stability as always claimed, and 2) the internalizers. Make no mistake; the SEC report tossed a shiny lure hoping all the bluefish would bite. One large firm that they can say “made a mistake” can be vilified, made a bogie man for the masses, and takes the heat off the SEC, The Exchanges, and The Real Issues. Don’t fall for the shiny lure. Hold out for the meaty clam, folks.
Sal – I just used a computer to make a trade on Schwab.com. I got exactly the price I wanted, and my commissions have never been lower. Can you explain to me again how technology is making my trading experience so much worse?
Sounds like you had a great trading experience. I am happy for you. PS Schwab internalized your order, sold it to an HFT shop, who shorted you your 500 shares at $26.45. Last sale is now $26.31.
And tell dad I said hi; I got him a new bulb planter.
But I got the fill I wanted!!! How is this a bad thing? I put a limit order in, they sold it to me at that exact price. I got the confirmation in less than a second, and I’m in Hong Kong, trading from an Internet cafe. I still don’t understand how I’m getting screwed.