5 ms·

That article is 85% hype. It reads like an editorial, not a news article. What exactly do you mean by "relationships with the stock exchanges"? If by that, you

by vecter 16y ago

That article is 85% hype. It reads like an editorial, not a news article. What exactly do you mean by "relationships with the stock exchanges"? If by that, you mean they pay the exchanges for colocation (which anyone can do), then yes, I would agree. If you mean the banks and exchanges are cronies and that the exchanges give the banks free perks because they're golf buddies, then that's wrong. The edge you are talking about in terms of "previewing orders" seems to refer to flash orders. Those no longer exist (which I think is good), but I doubt they were a high source of revenue or edge, given their low volume relative to the rest of market activity.

nudge 16y ago
I meant colocation - the costs of which I assume to be too high for individuals - and flash orders - which I did not know were no longer operating. My general point was just that the playing field is not exactly level - the banks have resources the individual does not have, if speed is the game you're playing. I didn't mean anything at all to do with personal relationships.
wglb 16y ago
There are several problems with this article; some errors (or simply incorrect terminology) and some things that are no longer true. There is a difference between "algo" trading, also known as "program trading" and HFT. The algorithms in HFT kind of boil down to "get it there fast". The thing that is no longer true is the flash orders (pointed out elsewhere in these comments) are no longer allowed. This is the reference to flash orders. The trick to being a HFT is to be big enough and fast enough that the exchanges pay you to trade. Thus, you don't necessarily have to make a profit on these trades. Then you are really a liquidity provider. Being an HFT is about size, speed and execution mostly, and ideas not so much. My advice is to not go after that market. It is likely that you are three or five orders of magnitude too small. Other strategies are more interesting for the small guy. Maybe become a MFT (medium frequency trader), whatever that is.

by vecter 16y ago

nudge 16y ago

I meant colocation - the costs of which I assume to be too high for individuals - and flash orders - which I did not know were no longer operating. My general point was just that the playing field is not exactly level - the banks have resources the individual does not have, if speed is the game you're playing. I didn't mean anything at all to do with personal relationships.

wglb 16y ago

There are several problems with this article; some errors (or simply incorrect terminology) and some things that are no longer true. There is a difference between "algo" trading, also known as "program trading" and HFT. The algorithms in HFT kind of boil down to "get it there fast". The thing that is no longer true is the flash orders (pointed out elsewhere in these comments) are no longer allowed. This is the reference to flash orders. The trick to being a HFT is to be big enough and fast enough that the exchanges pay you to trade. Thus, you don't necessarily have to make a profit on these trades. Then you are really a liquidity provider. Being an HFT is about size, speed and execution mostly, and ideas not so much. My advice is to not go after that market. It is likely that you are three or five orders of magnitude too small. Other strategies are more interesting for the small guy. Maybe become a MFT (medium frequency trader), whatever that is.