High Frequency Trading

[Bullitt]

Great presentation here by Mr. Denninger (one of the good guys) on the topic of HFT. How can volume figures be trusted anymore? What happens when the 'liquidity makers' start front running buy orders on inverse ETF's or sell orders on short sales? Is this what helped propel Oil to $145 a barrel?

Well this partially explains why 'trading' is the new vogue and why buy and hold is dead. These guys need someone to make a little extra beer money off of, and they're not going to get it if you don't trade. I often wonder who's behind all the 'you must trade if you want to make money' propaganda as of late. The Thought Police at it once again.

You're either inside or you're outside.

 

[Bullitt]

No mention of High Frequency Trading, but I can see that issue coming up in these hearings.

Massachusetts Subpoenas Goldman on Trading Huddles

Mr. Galvin, Massachusetts Secretary of the Commonwealth, said he is concerned the huddles, in which the firm's research staff give verbal short-term stock tips to Goldman traders and then firm clients, disadvantage some Goldman customers.

Internal documents reviewed by The Wall Street Journal show that at times, these short-term trading tips differed from Goldman's long-term research. Critics complain that Goldman's distribution of the trading ideas to its traders and major clients hurts other Goldman customers who aren't given the opportunity to trade on the information, and may be relying on the firm's longer-term research to make investment decisions.


The huddles, and what is discussed during or after them, currently aren't disclosed in Goldman's long-term research. On Monday the firm internally discussed adding information about the service on its client Web site. Some firms also give stock ideas to clients, but disclose the service in their longer-term research and on its Web site.

Source: WSJ Online

 

[Bullitt]

And with 10 minutes left, here comes the final 500 million share push before the close on the NYSE as the robots play a game of pong with blocks of Citigroup and Crocs.