Tag Archives: hft

How One Whistleblower Turned the Tables on High-Frequency Traders

A once esoteric corner of the stock market —- “order types” —- has taken center stage the past few years in the debate about the health of the market, the role of high-speed traders in it and how stock exchanges interact with clients.

A big reason for the scrutiny: Order types in many ways stand at the boundary between exchanges and their trading clients. As such, they play a crucial role in how buy and sell orders are handled and can determine whether an order is successful or not.

But few realized how complicated, and how problematic, they had become until a former high-speed trader, Haim Bodek, decided to blow the whistle to regulators in 2011.

First, a quick primer. Order types are instructions traders use to tell an exchange how a buy or sell order should be handled by the exchange, such as whether the order should be executed immediately or wait until a stock reaches a certain price level. There are hundreds of variations of order types, and many have proliferated in recent years, adding to the market’s complexity.

http://blogs.wsj.com/

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  • 87
    Fears that high-speed traders have been rigging the U.S. stock market went mainstream last week thanks to allegations in a book by financial author Michael Lewis, but there may be a more serious threat to investors: the increasing amount of trading that happens outside of exchanges. Some former regulators and…
    Tags: trading, exchanges, market, high-speed, traders, stock, hft
  • 86
    On February 12, 2014, starting at 13:31 and running right up to market close, a high frequency trading (HFT) algo placed and canceled 5,000 to 30,000 orders per second in individual stocks and ETFs. Many seconds had more than 20,000 bogus orders. There were 30 symbols affected: all beginning with…
    Tags: exchange, hft, stock, market, trading
  • 82
    The issues that remain un-addressed are most important, as flash crashes have significantly grown and the core legality of certain HFT practices remains unquestioned in most public debate Investment management magnet Cliff Asness has a problem with a Bloomberg View piece on High Frequency Trading (HFT) with particular focus on issues brought…
    Tags: hft, trading
  • 82
    The release of the latest Michael Lewis book, “Flash Boys,” and the subsequent report on “60 Minutes” has reignited the debate over the purpose and value of high-frequency trading (HFT). Like many innovations, HFT had some noble objectives when it first started (to improve both the cost and timing of…
    Tags: trading, hft, exchange, exchanges
  • 81
    For the past month, high-frequency trading has been under attack. The first volley came on a Sunday night in late March, when author Michael Lewis, introducing his new book Flash Boys on the news magazine program 60 Minutes, delivered the most perfectly succinct of all headline-grabbing comments. "The markets are…
    Tags: traders, trading, market, hft, high-speed

Are you frightened of high-frequency trading (HFT)?

Are you frightened of high-frequency trading (HFT)? Are you concerned about what it might do to your stock portfolio?

If so, you may have been exposed to Michael Lewis over the past few months. It’s been hard not to be, especially if you watch financial shows on TV or read the financial press. He’s been everywhere, giving interviews and promoting his blockbuster new book, Flash Boys: A Wall Street Revolt.

But is he right?

Lewis’ premise: the advent of HFT means that stock markets are now “rigged for the benefit of insiders,” as the book’s jacket flap notes inform us. And if that’s not frightening enough, it goes on to state, “The light that Lewis shines into the darkest corners of the financial world may not be good for your blood pressure, because if you have any contact with the market, even a retirement account, this story is happening to you.”

That’s great copy, isn’t it? Any good publisher understands that the easiest way to get people’s attention is to scare the crap out of them. Notions of shadowy conspiracies also work. And who wouldn’t want to know what’s going on in those darkest corners of the financial world?

Problem is, we’re already aware of what’s been happening in Wall Street’s figurative back rooms. We’ve been exposed to many of the big banks’ secrets, such as that many of them profited enormously from the crash of ‘08 by making huge bets against the very junk mortgage securities they were simultaneously promoting to their clients. Compared to that level of darkness, high-frequency trading is a sunny day in June.

But Michael Lewis delves into some important issues. Central among them is a pair of questions. Are the markets “rigged?” And if so, should we be concerned? I would answer yes and yes, but not for the reasons Lewis advances in his book.

The New Normal

Maybe someone without access to media of any kind might still believe that markets aren’t rigged, but the rest of us know that they are. The interest rate market, for example, is completely rigged by definition, since our central bank manipulates the cost of money at its whim.

With gold, the market is small enough that traders with sufficiently deep pockets, like the biggest banks, can push prices up or down to their hearts’ content.

With stocks, prices are sometimes rigged openly, such as when Washington prohibited short sales during the meltdown… and sometimes more subtly, as when the Fed buoys prices by pushing trillions in funny money into the system. The giant investment banks employ any number of shady tricks, such as arranging large transactions inside their “dark pools”—where buyers and sellers can connect directly and not affect the public stock price by going through an exchange. And there are always the market makers. As middlemen, their job is to provide liquidity, which they do by rigging the bid/ask spread (in such a way as to ensure profits for themselves, of course). They’ve been known to widen those spreads unjustifiably, and no one ever says, “Hey, wait a minute…”.

These are all concerns, sure, but they aren’t what Lewis writes about. His focus is on high-frequency traders, what they do, and why it’s so evil.

One of the bothersome things about the book is that Lewis presents his research with a “Wow, look at this mind-boggling secret I just uncovered” approach. And TV’s talking heads have largely gone along with him, expressing their shock. But we’ve known all about HFT for a long time. In fact, I wrote an article for Casey Extraordinary Technology that explained it 2.5 years ago, and since then both Alex Daley and I have expanded on the subject in this space.

Let’s be clear: no one completely understands what HFT is doing to the markets. While a human high-frequency trader may have a general idea of what his algorithm is up to—though even that is in question as advanced forms of artificial intelligence (AI) are now used to let the computer dynamically make up new rules regarding how to trade—that doesn’t mean he knows the net effect of its actions. With thousands of systems battling against each other, making millions of trades, it quickly becomes obvious that people are on the outside looking in—pretty ignorant of what these arrays of supercomputers are cooking up on their own at any given moment.

http://www.caseyresearch.com/cdd/how-i-learned-to-stop-worrying-and-love-high-frequency-trading

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    Tags: trading, market, prices, happening, money, traders, markets, high-frequency, stock, michael
  • 84
    A new book by author Michael Lewis describes how trading algorithms that detect and exploit tiny, fleeting profit opportunities, called high-frequency traders, have transformed the stock market. And not by ripping off middle class investors. But that doesn't mean there are no problems. Read on to understand what high-frequency trading is, and…
    Tags: trading, high-frequency, stock, market, hft
  • 80
    A once esoteric corner of the stock market —- “order types” —- has taken center stage the past few years in the debate about the health of the market, the role of high-speed traders in it and how stock exchanges interact with clients. A big reason for the scrutiny: Order…
    Tags: market, traders, stock, trading, hft
  • 80
    For the past month, high-frequency trading has been under attack. The first volley came on a Sunday night in late March, when author Michael Lewis, introducing his new book Flash Boys on the news magazine program 60 Minutes, delivered the most perfectly succinct of all headline-grabbing comments. "The markets are…
    Tags: high-frequency, traders, trading, market, hft, rigged, michael, lewis, book, markets
  • 79
    I wonder if SAC Capital's Steve Cohen sent Michael Lewis a thank-you note. Lately, it seems like all anyone can talk about is high-frequency tradingand the new book "Flash Boys." But long before there was HFT, there was insider trading. There's a common perception (fueled by a rabid media) that insider…
    Tags: trading, going, financial, michael, lewis, high-frequency, book, hft

As Asness Proclaims His Love For High Speed Trading, Are Issues Ignored?

The issues that remain un-addressed are most important, as flash crashes have significantly grown and the core legality of certain HFT practices remains unquestioned in most public debate

Investment management magnet Cliff Asness has a problem with a Bloomberg View piece on High Frequency Trading (HFT) with particular focus on issues brought up by Michael Lewis in the book Flash Boys. While he makes good points, the real mastery of the HFT debate is how the key issues remain undiscussed.

http://www.valuewalk.com/2014/06/asness-high-speed-trading/

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    The release of the latest Michael Lewis book, “Flash Boys,” and the subsequent report on “60 Minutes” has reignited the debate over the purpose and value of high-frequency trading (HFT). Like many innovations, HFT had some noble objectives when it first started (to improve both the cost and timing of…
    Tags: trading, hft, focus, view, boys, flash, book, michael, lewis, debate
  • 83
    Fears that high-speed traders have been rigging the U.S. stock market went mainstream last week thanks to allegations in a book by financial author Michael Lewis, but there may be a more serious threat to investors: the increasing amount of trading that happens outside of exchanges. Some former regulators and…
    Tags: trading, high, frequency, problem, michael, lewis, book, hft
  • 82
    A once esoteric corner of the stock market —- “order types” —- has taken center stage the past few years in the debate about the health of the market, the role of high-speed traders in it and how stock exchanges interact with clients. A big reason for the scrutiny: Order…
    Tags: trading, hft
  • 82
    On February 12, 2014, starting at 13:31 and running right up to market close, a high frequency trading (HFT) algo placed and canceled 5,000 to 30,000 orders per second in individual stocks and ETFs. Many seconds had more than 20,000 bogus orders. There were 30 symbols affected: all beginning with…
    Tags: hft, high, frequency, trading
  • 81
    I wonder if SAC Capital's Steve Cohen sent Michael Lewis a thank-you note. Lately, it seems like all anyone can talk about is high-frequency tradingand the new book "Flash Boys." But long before there was HFT, there was insider trading. There's a common perception (fueled by a rabid media) that insider…
    Tags: trading, michael, lewis, flash, book, boys, hft

Why I Love High-Speed Trading by @Cimmerian999

Separately, and along with my colleagues Aaron Brown, Michael Mendelson and Hitesh Mittal, I have written several articles on high-frequency trading. We believe HFT has lowered investors’ trading costs and that many of the attacks on it are misguided. We have expressed concern that our fragmented, domestic trading infrastructure is technologically risky and due for a hard look, separate from allegations about HFT. Finally, we’ve noted the obvious: that while defending HFT broadly, we can’t and wouldn’t vouch that each HFT trader acts lawfully and ethically (nor would we do so for each Good Humor ice cream salesman).

Bloomberg View contributor Noah Smith recently wrote on HFT. I haven’t responded to other articles on HFT, but Smith focuses directly on our writings and his overall conclusion is very similar to ours, though far more equivocal. So, I will make an exception and respond to Smith — rather than to the legion of rather nutty pieces out there — out of respect, not ire.

First things first. Smith calls me a “hedge fund magnate.” Although being a magnate sounds kind of cool, my firm — AQR Capital Management — is more of a diversified-investment manager than a hedge fund. We manage a lot of traditional funds as well as hedge funds. In the hedge-fund space, AQR is known for demystifying strategies and rationalizing fees (in other words, lowering them), so the whole label is a little off. Still, it’s more interesting and punchy than “the senior guy at a midsize investment manager” and clearly “magnate” is better for me than “plutocrat,” “oligarch” or “fat cat,” so maybe I should feel lucky.

http://www.bloombergview.com/

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  • 78
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    Tags: trading, high-frequency, kind, investors, hft
  • 75
    When hedge funds use bots to buy and sell stocks within milliseconds, they're not improving the market. They're rigging the market.   High-frequency trading (HFT) hedge funds. These funds use computer algorithms—a.k.a.: algobots—to buy and sell stocks at incredible speeds. We're talking milliseconds. The idea is to react to any market news or…
    Tags: funds, hedge, trading, hft, high-frequency, high-speed
  • 74
    Thank you for that kind introduction. And my sincere thanks to everyone here for joining this lunchtime session. It’s a great pleasure and privilege to return to New York. I want to offer a few reflections this afternoon on market innovation and, in particular, the on-going debate around high frequency…
    Tags: trading, feel, clearly, firm, kind, hft, high-frequency
  • 74
    The issues that remain un-addressed are most important, as flash crashes have significantly grown and the core legality of certain HFT practices remains unquestioned in most public debate Investment management magnet Cliff Asness has a problem with a Bloomberg View piece on High Frequency Trading (HFT) with particular focus on issues brought…
    Tags: hft, trading, michael, view, good, management, love, investment, bloomberg
  • 73
    A once esoteric corner of the stock market —- “order types” —- has taken center stage the past few years in the debate about the health of the market, the role of high-speed traders in it and how stock exchanges interact with clients. A big reason for the scrutiny: Order…
    Tags: high-speed, trading, hft

The battle against the high frequency traders

A ‘flash crash’ can knock a trillion dollars off the stock market in minutes as elite traders fleece the little guys. So why aren’t the regulators stepping in? We talk to the legendary lawyer preparing for an epic showdown

Back in the 1990s, when doctors had all but given up on holding the American tobacco industry to account, the lawyer Michael Lewis found an ingenious way through their defences. If juries couldn’t see past individuals’ responsibility for their habit, he reasoned, why not sue on behalf of individual states and their smoke-burdened Medicaid systems? Lewis gathered a team and tested the approach. In 1994, on behalf of the state of Mississippi, he sued 13 tobacco companies for the cost of treating cigarette-related illness; they were joined by another 38 US states and, under intense pressure, Big Tobacco agreed to pay $368.5bn. The industry’s nemesis became legal legend.

A proud Mississippian, Lewis wears his intellect with quiet southern grace; he listens before speaking and never interrupts. In almost half a century of legal practice, he thought he’d seen everything, but over 14 years of retirement he watched the world lurch towards a new technology-driven feudalism, defined by disparities in wealth that were more keenly felt in his own state than most. He was feeling ready for another dragon to slay.

http://www.theguardian.com

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    A once esoteric corner of the stock market —- “order types” —- has taken center stage the past few years in the debate about the health of the market, the role of high-speed traders in it and how stock exchanges interact with clients. A big reason for the scrutiny: Order…
    Tags: market, traders, stock, years, trading, hft
  • 76
    Fears that high-speed traders have been rigging the U.S. stock market went mainstream last week thanks to allegations in a book by financial author Michael Lewis, but there may be a more serious threat to investors: the increasing amount of trading that happens outside of exchanges. Some former regulators and…
    Tags: trading, market, regulators, high, frequency, cost, traders, stock, michael, lewis
  • 74
    On February 12, 2014, starting at 13:31 and running right up to market close, a high frequency trading (HFT) algo placed and canceled 5,000 to 30,000 orders per second in individual stocks and ETFs. Many seconds had more than 20,000 bogus orders. There were 30 symbols affected: all beginning with…
    Tags: hft, stock, high, market, frequency, trading, individual
  • 74
    The issues that remain un-addressed are most important, as flash crashes have significantly grown and the core legality of certain HFT practices remains unquestioned in most public debate Investment management magnet Cliff Asness has a problem with a Bloomberg View piece on High Frequency Trading (HFT) with particular focus on issues brought…
    Tags: hft, flash, trading, high, lewis, michael, frequency
  • 73
    The release of the latest Michael Lewis book, “Flash Boys,” and the subsequent report on “60 Minutes” has reignited the debate over the purpose and value of high-frequency trading (HFT). Like many innovations, HFT had some noble objectives when it first started (to improve both the cost and timing of…
    Tags: trading, hft, minutes, flash, michael, lewis, individuals, cost

Regulating high frequency trading

Thank you for that kind introduction. And my sincere thanks to everyone here for joining this lunchtime session. It’s a great pleasure and privilege to return to New York.

I want to offer a few reflections this afternoon on market innovation and, in particular, the on-going debate around high frequency trading (HFT), which has dominated global media over the last few months.

For regulators of course, the interest here is not simply around the novelty of 21st century technology (as important as this is) it’s also in the link between speed, market fairness, efficiency and safety – which is clearly a much longer-running saga in financial services.

And I feel able to speak with at least a little authority on this, having spent much of my career at the London Stock Exchange. And the London Stock Exchange was, of course, the venue for the first high frequency trade.

Now, I sense a little scepticism here – I am sure you are asking how anybody could be so definitive on such a fast-moving topic. Even the experts can’t quite agree a firm definition of what a high frequency trade is, so let me explain.

http://www.fca.org.uk/

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    A new book by author Michael Lewis describes how trading algorithms that detect and exploit tiny, fleeting profit opportunities, called high-frequency traders, have transformed the stock market. And not by ripping off middle class investors. But that doesn't mean there are no problems. Read on to understand what high-frequency trading is, and…
    Tags: trading, high-frequency, stock, exchange, market, kind, york, hft
  • 84
    Fears that high-speed traders have been rigging the U.S. stock market went mainstream last week thanks to allegations in a book by financial author Michael Lewis, but there may be a more serious threat to investors: the increasing amount of trading that happens outside of exchanges. Some former regulators and…
    Tags: trading, market, regulators, high, frequency, high-frequency, stock, financial, hft
  • 82
    When hedge funds use bots to buy and sell stocks within milliseconds, they're not improving the market. They're rigging the market.   High-frequency trading (HFT) hedge funds. These funds use computer algorithms—a.k.a.: algobots—to buy and sell stocks at incredible speeds. We're talking milliseconds. The idea is to react to any market news or…
    Tags: market, trading, hft, high-frequency
  • 80
    I wonder if SAC Capital's Steve Cohen sent Michael Lewis a thank-you note. Lately, it seems like all anyone can talk about is high-frequency tradingand the new book "Flash Boys." But long before there was HFT, there was insider trading. There's a common perception (fueled by a rabid media) that insider…
    Tags: trading, financial, high-frequency, media, hft
  • 80
    The release of the latest Michael Lewis book, “Flash Boys,” and the subsequent report on “60 Minutes” has reignited the debate over the purpose and value of high-frequency trading (HFT). Like many innovations, HFT had some noble objectives when it first started (to improve both the cost and timing of…
    Tags: trading, hft, high-frequency, exchange, debate

Confused about high-frequency trading? Here’s a guide

A new book by author Michael Lewis describes how trading algorithms that detect and exploit tiny, fleeting profit opportunities, called high-frequency traders, have transformed the stock market. And not by ripping off middle class investors. But that doesn’t mean there are no problems. Read on to understand what high-frequency trading is, and what the real issues with it are.

What is high-frequency trading?

If you’re an average human being, your eyes take around 400 milliseconds to blink once. High-frequency trading is a kind of market activity that moves in less than one millisecond to spot and take advantage of an opportunity to buy or sell. It happens through trading algorithms, programs that determine how to trade based on fast-moving market data.

The kind of profit opportunities that high-frequency trading looks for aren’t the things most investors ever think about. They’re not betting that technology companies will see their profits grow more quickly than expected, for example, or that a recession is coming.

Instead, they’re looking for tiny opportunities for arbitrage. Imagine that, at precisely 10:30:01.01 AM, a share of Bank of America’s stock was trading at $16.02 on the New York Stock Exchange – but it was $16.04 on a smaller exchange called BATS. A high-frequency trading computer might spring into action by buying up shares of stock on the New York Stock Exchange and selling them on BATS. To make money this way you need to move super-fast, because the opportunity could vanish at any moment.

http://www.vox.com/

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    When hedge funds use bots to buy and sell stocks within milliseconds, they're not improving the market. They're rigging the market.   High-frequency trading (HFT) hedge funds. These funds use computer algorithms—a.k.a.: algobots—to buy and sell stocks at incredible speeds. We're talking milliseconds. The idea is to react to any market news or…
    Tags: market, they're, trading, hft, high-frequency
  • 89
    Fears that high-speed traders have been rigging the U.S. stock market went mainstream last week thanks to allegations in a book by financial author Michael Lewis, but there may be a more serious threat to investors: the increasing amount of trading that happens outside of exchanges. Some former regulators and…
    Tags: trading, market, investors, high-frequency, stock, hft
  • 88
    Thank you for that kind introduction. And my sincere thanks to everyone here for joining this lunchtime session. It’s a great pleasure and privilege to return to New York. I want to offer a few reflections this afternoon on market innovation and, in particular, the on-going debate around high frequency…
    Tags: market, exchange, trading, stock, york, kind, hft, high-frequency
  • 86
    The release of the latest Michael Lewis book, “Flash Boys,” and the subsequent report on “60 Minutes” has reignited the debate over the purpose and value of high-frequency trading (HFT). Like many innovations, HFT had some noble objectives when it first started (to improve both the cost and timing of…
    Tags: trading, hft, high-frequency, exchange
  • 85
    For the past month, high-frequency trading has been under attack. The first volley came on a Sunday night in late March, when author Michael Lewis, introducing his new book Flash Boys on the news magazine program 60 Minutes, delivered the most perfectly succinct of all headline-grabbing comments. "The markets are…
    Tags: high-frequency, trading, market, hft, investors, called

High-speed traders are defending their practices in a newer, faster market.

For the past month, high-frequency trading has been under attack. The first volley came on a Sunday night in late March, when author Michael Lewis, introducing his new book Flash Boys on the news magazine program 60 Minutes, delivered the most perfectly succinct of all headline-grabbing comments. “The markets are rigged,” he told correspondent Steve Kroft, implying that high-frequency traders front-run the market and are cheating ordinary investors.

Manoj Narang, Tradeworx

Read more :  http://www.tradersmagazine.com/

Since then, the imagery used to battle HFT has only grown more fanciful and over the top. Charles Schwab, founder of the brokerage firm that bears his name, called high-frequency traders a “cancer,” and Jim Kramer told his CNBC audience that “defending high-frequency trading is no different than defending the mosquito.”

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    A new book by author Michael Lewis describes how trading algorithms that detect and exploit tiny, fleeting profit opportunities, called high-frequency traders, have transformed the stock market. And not by ripping off middle class investors. But that doesn't mean there are no problems. Read on to understand what high-frequency trading is, and…
    Tags: trading, high-frequency, market, called, investors, hft
  • 82
    Fears that high-speed traders have been rigging the U.S. stock market went mainstream last week thanks to allegations in a book by financial author Michael Lewis, but there may be a more serious threat to investors: the increasing amount of trading that happens outside of exchanges. Some former regulators and…
    Tags: trading, market, investors, high-speed, traders, markets, high-frequency, michael, lewis, author
  • 81
    When hedge funds use bots to buy and sell stocks within milliseconds, they're not improving the market. They're rigging the market.   High-frequency trading (HFT) hedge funds. These funds use computer algorithms—a.k.a.: algobots—to buy and sell stocks at incredible speeds. We're talking milliseconds. The idea is to react to any market news or…
    Tags: market, trading, news, hft, cheating, high-frequency, high-speed
  • 81
    A once esoteric corner of the stock market —- “order types” —- has taken center stage the past few years in the debate about the health of the market, the role of high-speed traders in it and how stock exchanges interact with clients. A big reason for the scrutiny: Order…
    Tags: market, traders, high-speed, trading, hft
  • 80
    The issues that remain un-addressed are most important, as flash crashes have significantly grown and the core legality of certain HFT practices remains unquestioned in most public debate Investment management magnet Cliff Asness has a problem with a Bloomberg View piece on High Frequency Trading (HFT) with particular focus on issues brought…
    Tags: hft, flash, trading, lewis, book, michael, boys, grown, practices

How Individuals Should Think About High-Frequency Trading

The release of the latest Michael Lewis book, “Flash Boys,” and the subsequent report on “60 Minutes” has reignited the debate over the purpose and value of high-frequency trading (HFT).

Like many innovations, HFT had some noble objectives when it first started (to improve both the cost and timing of trades) but the concept has morphed and changed well beyond its original intent. The original purpose of HFT began to change, in my view, when the exchanges began to focus on HFT firms and began to recruit and incent them to set up shop on or near their exchange location so that they could gain milliseconds over other trading firms, which gave them a trading advantage. As is often the case, the regulatory agencies tend to be slow to react to these new innovations.

http://blogs.wsj.com/

Related Posts

  • 86
    A new book by author Michael Lewis describes how trading algorithms that detect and exploit tiny, fleeting profit opportunities, called high-frequency traders, have transformed the stock market. And not by ripping off middle class investors. But that doesn't mean there are no problems. Read on to understand what high-frequency trading is, and…
    Tags: trading, high-frequency, exchange, hft
  • 83
    The issues that remain un-addressed are most important, as flash crashes have significantly grown and the core legality of certain HFT practices remains unquestioned in most public debate Investment management magnet Cliff Asness has a problem with a Bloomberg View piece on High Frequency Trading (HFT) with particular focus on issues brought…
    Tags: hft, debate, flash, trading, lewis, book, michael, boys, focus, view
  • 83
    Fears that high-speed traders have been rigging the U.S. stock market went mainstream last week thanks to allegations in a book by financial author Michael Lewis, but there may be a more serious threat to investors: the increasing amount of trading that happens outside of exchanges. Some former regulators and…
    Tags: trading, exchanges, cost, high-frequency, michael, lewis, book, hft
  • 82
    A once esoteric corner of the stock market —- “order types” —- has taken center stage the past few years in the debate about the health of the market, the role of high-speed traders in it and how stock exchanges interact with clients. A big reason for the scrutiny: Order…
    Tags: exchanges, exchange, trading, hft
  • 82
    When hedge funds use bots to buy and sell stocks within milliseconds, they're not improving the market. They're rigging the market.   High-frequency trading (HFT) hedge funds. These funds use computer algorithms—a.k.a.: algobots—to buy and sell stocks at incredible speeds. We're talking milliseconds. The idea is to react to any market news or…
    Tags: milliseconds, trading, react, hft, high-frequency

The truth about insider trading. @turneyduff #HFT #InsiderTrading

I wonder if SAC Capital’s Steve Cohen sent Michael Lewis a thank-you note. Lately, it seems like all anyone can talk about is high-frequency tradingand the new book “Flash Boys.” But long before there was HFT, there was insider trading.

There’s a common perception (fueled by a rabid media) that insider trading is equivalent to getting Wednesday’s winning lottery numbers on Tuesday. Sometimes it is — but not often. Don’t get me wrong, if Rajat Gupta called me at 3:58 p.m. to say Warren Buffett is going to infuse Goldman Sachswith a $5 billion boost in the middle of a financial crisis, that would be like LeBron James stealing the ball and heading down court for a SportsCenter highlight.

http://www.cnbc.com/id/101586358

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  • 85
    A new book by author Michael Lewis describes how trading algorithms that detect and exploit tiny, fleeting profit opportunities, called high-frequency traders, have transformed the stock market. And not by ripping off middle class investors. But that doesn't mean there are no problems. Read on to understand what high-frequency trading is, and…
    Tags: trading, high-frequency, called, $, hft
  • 81
    The issues that remain un-addressed are most important, as flash crashes have significantly grown and the core legality of certain HFT practices remains unquestioned in most public debate Investment management magnet Cliff Asness has a problem with a Bloomberg View piece on High Frequency Trading (HFT) with particular focus on issues brought…
    Tags: hft, flash, trading, lewis, book, michael, boys
  • 81
    Fears that high-speed traders have been rigging the U.S. stock market went mainstream last week thanks to allegations in a book by financial author Michael Lewis, but there may be a more serious threat to investors: the increasing amount of trading that happens outside of exchanges. Some former regulators and…
    Tags: trading, #hft, high-frequency, michael, lewis, financial, book, hft
  • 81
    When hedge funds use bots to buy and sell stocks within milliseconds, they're not improving the market. They're rigging the market.   High-frequency trading (HFT) hedge funds. These funds use computer algorithms—a.k.a.: algobots—to buy and sell stocks at incredible speeds. We're talking milliseconds. The idea is to react to any market news or…
    Tags: trading, hft, high-frequency
  • 80
    The release of the latest Michael Lewis book, “Flash Boys,” and the subsequent report on “60 Minutes” has reignited the debate over the purpose and value of high-frequency trading (HFT). Like many innovations, HFT had some noble objectives when it first started (to improve both the cost and timing of…
    Tags: trading, hft, high-frequency, boys, flash, book, michael, lewis