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Retail traders don't have liquidity needs on a sub-second basis. They'd all be better off with exchanges that used batch auctions. HFT is a tax on our economy.

by natrius 11y ago

Retail traders don't have liquidity needs on a sub-second basis. They'd all be better off with exchanges that used batch auctions. HFT is a tax on our economy. http://www.businessinsider.com/michael-lewis-high-frequency-trading-and-frequent-batch-auctions-2014-3 http://www.businessinsider.com/michael-lewis-high-frequency-...

Mikeb85 11y ago
No, retail traders don't. However if I go through my electronic broker, it's then trading on the 'real market' on my behalf, and the extra liquidity is much appreciated. And trading today is cheaper than ever before. I actually started trading on the TSX-V market, which has super-low liquidity and no HFT players (not even sure if there are market makers for most of the stocks). It's pretty much my idea of what hell is like. BTW, here's an interesting link: http://www.forbes.com/sites/timworstall/2015/01/26/relax-everyone-the-high-frequency-trading-problem-is-over/ http://www.forbes.com/sites/timworstall/2015/01/26/relax-eve... The thing about HFT, is that it's basically arbitrage. People used to do it manually, machines of course do it better. Now spreads are so small, there's basically no profit in it. The result, better liquidity than ever, smallest spreads in history. And yes I've read all the anti-HFT propaganda - but I'm also in the markets, and I like trading in high-liquidity markets, especially after trading in low-liquidity markets...
- mrchicity 11y ago
  According to IIROC (Canada's SEC), HFTs are active on TSX-V, but not in all stocks or to the same extent that they trade the TSX blue chips. I would imagine they'd stick with the highest volume TSX-V stocks. The ones that aren't liquid have low opportunity and risks that are impossible to model/hedge (penny stocks can easily go to 0 from an accounting scandal or jump 1000% if a wildcat strikes gold or oil). "Figure 9 shows the HFT participation as a fraction of all transactions and value. Compared to the main market, HFT activity in TSXV stocks is lower, with only 20% of transactions and less than 10% of value involving an HFT on the passive side (aggressive volume is negligible). As Panel C indicates, however, they submit about 55% of all orders, and they are thus noticeable in these securities. Panel D highlights the share of HFT and other traders’ orders relative to best prices. HFTs generally submit more than half of the orders that are submitted at the best price or that are improving the best price." [1] 1: http://docs.iiroc.ca/DisplayDocument.aspx?DocumentID=048AE4017CF34FCE8243ECD7A3C2913A&Language=en http://docs.iiroc.ca/DisplayDocument.aspx?DocumentID=048AE40...

by natrius 11y ago

Mikeb85 11y ago

No, retail traders don't. However if I go through my electronic broker, it's then trading on the 'real market' on my behalf, and the extra liquidity is much appreciated. And trading today is cheaper than ever before. I actually started trading on the TSX-V market, which has super-low liquidity and no HFT players (not even sure if there are market makers for most of the stocks). It's pretty much my idea of what hell is like. BTW, here's an interesting link: http://www.forbes.com/sites/timworstall/2015/01/26/relax-everyone-the-high-frequency-trading-problem-is-over/ http://www.forbes.com/sites/timworstall/2015/01/26/relax-eve... The thing about HFT, is that it's basically arbitrage. People used to do it manually, machines of course do it better. Now spreads are so small, there's basically no profit in it. The result, better liquidity than ever, smallest spreads in history. And yes I've read all the anti-HFT propaganda - but I'm also in the markets, and I like trading in high-liquidity markets, especially after trading in low-liquidity markets...

mrchicity 11y ago
According to IIROC (Canada's SEC), HFTs are active on TSX-V, but not in all stocks or to the same extent that they trade the TSX blue chips. I would imagine they'd stick with the highest volume TSX-V stocks. The ones that aren't liquid have low opportunity and risks that are impossible to model/hedge (penny stocks can easily go to 0 from an accounting scandal or jump 1000% if a wildcat strikes gold or oil). "Figure 9 shows the HFT participation as a fraction of all transactions and value. Compared to the main market, HFT activity in TSXV stocks is lower, with only 20% of transactions and less than 10% of value involving an HFT on the passive side (aggressive volume is negligible). As Panel C indicates, however, they submit about 55% of all orders, and they are thus noticeable in these securities. Panel D highlights the share of HFT and other traders’ orders relative to best prices. HFTs generally submit more than half of the orders that are submitted at the best price or that are improving the best price." [1] 1: http://docs.iiroc.ca/DisplayDocument.aspx?DocumentID=048AE4017CF34FCE8243ECD7A3C2913A&Language=en http://docs.iiroc.ca/DisplayDocument.aspx?DocumentID=048AE40...