Article out this week on the microwave vs. fiber time delay between NY and Chicago, and a new trans-Atlantic cable being laid just for London quote time efficiency.
I would like to see a fee imposed on puts, and have a long enough time for those micro-payments to clear, so that an actual, visible quote is available to call them, rather than just a ramping of prices. It doesn’t have to be large, but it does have to clear, to stabilize prices a bit.
I also think you should have to buy your shorts, not just borrow them. Some closely held corps don’t even have enough outstanding shares to cover what some short sellers are using against them.
First link has nothing to do with algorithmic trading. Second link has nothing to do with algorithmic trading. Third link is to a Quora question about whether HFT is basically frontrunning, and the top answer says no, it isn’t.
I wasn’t questioning the existence of frontrunning. I was questioning your claim that algorithmic trading leads to frontrunning and therefore adding small transaction fees would reduce frontrunning. Nothing in the links you posted in reply seems to me to suggest that there’s any validity to that claim.
nanex
Your link describes one flash crash, about seven years ago. So far as I can tell there have been maybe four substantial flash crashes. I am happy to agree that extremely short-duration trading anomalies are likely to be the result of automated trading; what I am unconvinced by (and here I wasn’t nearly explicit enough, for which my apologies) is that this is actually a big deal. How much actual damage have flash crashes done, in total? My impression is that the answer is “really rather little”.
Incidentally, as you say the SEC blame lack of liquidity for the 2010 flash crash; so here’s a hypothesis I would be interested to see you refute: Slowing down trading would simply make flash crashes slower. It is not at all clear to me that that would be an improvement. (Does Hunsader’s account of things suggest I’m wrong? I don’t think so. He suggests deliberate malice by actual human beings, and IIUC his theory is that the proximate cause of the flash crash was a 30-second delay in some sources of price data. In other words, the crash came about in part because for some traders things were too slow.)
I also think you should have to buy your shorts, not just borrow them.
You said that before and I replied “What exactly is your proposal?”. I am still interested.
No idea, i don’t know the market feedbacks well enough to solve this problem. I know that alot of folks see the shorting avenue as a way to give negative feedback on a company, and that the markets monetize on volatility, but it seems that shorting with borrowed options is a suboptimal way to give feedback. Perhaps it comes down to a gambling market, as in the futures trading that many here are interested in. But with the majority of money trading in the Dark Markets, between the big dog Banks, maybe we have lost control of these markets anyway. As it stands now, the EPS vs. valuations, is totally unrealistic anyway. It looks like gambling more than ever, and the casino is controlling the odds.
Frontrunning
https://secure.marketwatch.com/story/hsbc-foreign-exchange-executive-charged-with-front-running-order-2016-07-20-151031929
http://www.businessinsider.com/bank-of-america-accused-of-front-unning-2014-1
https://www.quora.com/Is-HFT-basically-electronic-front-running-due-to-differing-latency
Article out this week on the microwave vs. fiber time delay between NY and Chicago, and a new trans-Atlantic cable being laid just for London quote time efficiency.
Algo trading researcher
http://www.nanex.net/NxResearch/
And the SEC doesn’t think he is accurate, but...
http://www.reuters.com/article/us-flashcrash-nanex-idUSTRE6935SA20101004
I would like to see a fee imposed on puts, and have a long enough time for those micro-payments to clear, so that an actual, visible quote is available to call them, rather than just a ramping of prices. It doesn’t have to be large, but it does have to clear, to stabilize prices a bit.
I also think you should have to buy your shorts, not just borrow them. Some closely held corps don’t even have enough outstanding shares to cover what some short sellers are using against them.
First link has nothing to do with algorithmic trading. Second link has nothing to do with algorithmic trading. Third link is to a Quora question about whether HFT is basically frontrunning, and the top answer says no, it isn’t.
I wasn’t questioning the existence of frontrunning. I was questioning your claim that algorithmic trading leads to frontrunning and therefore adding small transaction fees would reduce frontrunning. Nothing in the links you posted in reply seems to me to suggest that there’s any validity to that claim.
Your link describes one flash crash, about seven years ago. So far as I can tell there have been maybe four substantial flash crashes. I am happy to agree that extremely short-duration trading anomalies are likely to be the result of automated trading; what I am unconvinced by (and here I wasn’t nearly explicit enough, for which my apologies) is that this is actually a big deal. How much actual damage have flash crashes done, in total? My impression is that the answer is “really rather little”.
Incidentally, as you say the SEC blame lack of liquidity for the 2010 flash crash; so here’s a hypothesis I would be interested to see you refute: Slowing down trading would simply make flash crashes slower. It is not at all clear to me that that would be an improvement. (Does Hunsader’s account of things suggest I’m wrong? I don’t think so. He suggests deliberate malice by actual human beings, and IIUC his theory is that the proximate cause of the flash crash was a 30-second delay in some sources of price data. In other words, the crash came about in part because for some traders things were too slow.)
You said that before and I replied “What exactly is your proposal?”. I am still interested.
No idea, i don’t know the market feedbacks well enough to solve this problem. I know that alot of folks see the shorting avenue as a way to give negative feedback on a company, and that the markets monetize on volatility, but it seems that shorting with borrowed options is a suboptimal way to give feedback. Perhaps it comes down to a gambling market, as in the futures trading that many here are interested in. But with the majority of money trading in the Dark Markets, between the big dog Banks, maybe we have lost control of these markets anyway. As it stands now, the EPS vs. valuations, is totally unrealistic anyway. It looks like gambling more than ever, and the casino is controlling the odds.
Why do you have the urge to post things about which you have no clue..?