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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
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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
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