Re: High frequency trading - financial spam that does make a profit?

[Martin Tomasek <tomasek () ufe cz>]

Rob, grandpa of Ryan, Trevor, Devon & Hannah napsal(a):
> Stock traders with faster computers are at an advantage, and can manipulate the 
> stock market.
>   

I watched this issue from the beginning. Original article afaik appeared 
on Zero Hedge blog. It was about Goldman Sachs suing HFT programmer for 
industrial espionage. To the date I haven't seen any HFT algorithm (or 
'algo' as called by traders). I would like to see one.. :-)

> a collection of high-frequency traders for just 30 milliseconds — 0.03 seconds — 
> in what are known as flash orders. While markets are supposed to ensure 
>   

...

> "In less than half a second, high-frequency traders gained a valuable insight: 
>   

afaik 0.5s delay was introduced by nasdaq to help hft. and, also afaik, 
the hft software is issuing IOC (immediate or cancel) type orders, which 
allows them to probe the landscape.

> I've often said that the stock market was a casino.  I was wrong.  Casinos take 
> great care that people with faster computers can't manipulate them ...
>   

Stock marked is based on fraud and always was. You can win by two ways 
only: by knowing others don't (aka insider trading) or by cheating. HFT 
is the second way.

-- 
Martin Tomasek

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