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The large investment banks actually have a code they can append to their orders so they can jump to the top of the order cue. That is the definition of "front

The large investment banks actually have a code they can append to their orders so they can jump to the top of the order cue. That is the definition of "front running". I'd like to see a 1 cent tax per share per transaction. That'd dramatically limit HFT.

pille 13y ago
> The large investment banks actually have a code they can append to their orders so they can jump to the top of the order cue. Source? I believe you but I'd like to be able to quote an authority if I'm telling someone else about this. I've gotten into this HFT debate with colleagues, and I'm pretty sure none of us knew about this nifty trick.
- smartbuttcute 13y ago
  This is where I read about it. http://online.wsj.com/news/articles/SB10000872396390444812704577605840263150860 http://online.wsj.com/news/articles/SB1000087239639044481270...
harryh 13y ago
Why would a tax limit HFT and not just push spreads apart by the amount of the tax?
- smartbuttcute 13y ago
  I had not heard that idea before. I think it might not work because the HFT people are selling just as much as they are buying.
djoldman 13y ago
Anyone connected to Direct Edge can send an order flagged as HideNotSlide. Everyone is playing on an even field with respect to that order type. HideNotSlide does not cause an order to "jump to the top of the order cue[sic]." It preserves your order entry time at a price that is contra the NBBO if there is not an order at Direct Edge at the NBBO (if there is an order at Direct Edge at the NBBO the incoming HideNotSlide order is filled). I doubt "HFT" would be dramatically limited by a transaction tax. I believe that it would lower trading volume by some amount and widen the bid/ask by some amount. The number of "HFT" firms and their trading habits would look mostly the same though.
- smartbuttcute 13y ago
  I visited DirectEdge.com I doesn't appear that the average investor is allowed to join. http://www.directedge.com/Portals/0/04Support/Membership/EDGA%20Exchange%20Application.pdf http://www.directedge.com/Portals/0/04Support/Membership/EDG...
  - djoldman 13y ago
    You don't have to be a member of the exchange to trade there. You can connect through many outlets, some of whom offer a FIX (Financial Information eXchange) API. You can submit HideNotSlide orders through FIX and perhaps through your brokers' GUIs. The point is that no special license or membership is required, although you may have to do some work to implement this type of order.

pille 13y ago

> The large investment banks actually have a code they can append to their orders so they can jump to the top of the order cue. Source? I believe you but I'd like to be able to quote an authority if I'm telling someone else about this. I've gotten into this HFT debate with colleagues, and I'm pretty sure none of us knew about this nifty trick.

smartbuttcute 13y ago
This is where I read about it. http://online.wsj.com/news/articles/SB10000872396390444812704577605840263150860 http://online.wsj.com/news/articles/SB1000087239639044481270...

harryh 13y ago

Why would a tax limit HFT and not just push spreads apart by the amount of the tax?

smartbuttcute 13y ago
I had not heard that idea before. I think it might not work because the HFT people are selling just as much as they are buying.

djoldman 13y ago

Anyone connected to Direct Edge can send an order flagged as HideNotSlide. Everyone is playing on an even field with respect to that order type. HideNotSlide does not cause an order to "jump to the top of the order cue[sic]." It preserves your order entry time at a price that is contra the NBBO if there is not an order at Direct Edge at the NBBO (if there is an order at Direct Edge at the NBBO the incoming HideNotSlide order is filled). I doubt "HFT" would be dramatically limited by a transaction tax. I believe that it would lower trading volume by some amount and widen the bid/ask by some amount. The number of "HFT" firms and their trading habits would look mostly the same though.

smartbuttcute 13y ago
I visited DirectEdge.com I doesn't appear that the average investor is allowed to join. http://www.directedge.com/Portals/0/04Support/Membership/EDGA%20Exchange%20Application.pdf http://www.directedge.com/Portals/0/04Support/Membership/EDG...
- djoldman 13y ago
  You don't have to be a member of the exchange to trade there. You can connect through many outlets, some of whom offer a FIX (Financial Information eXchange) API. You can submit HideNotSlide orders through FIX and perhaps through your brokers' GUIs. The point is that no special license or membership is required, although you may have to do some work to implement this type of order.