4 ms·

Here's a good thread over at New Mogul on the subject. This type of trading is not illegal, and it's actually commonplace among the big players on Wall Street.

Here's a good thread over at New Mogul on the subject. This type of trading is not illegal, and it's actually commonplace among the big players on Wall Street. http://newmogul.com/item?id=14134 http://newmogul.com/item?id=14134

roc 17y ago
Call me jaded, but 'commonplace' and 'not technically illegal' don't strike me as a very compelling defense.
- BrentRitterbeck 17y ago
  Please don't try to interpret what I meant. What I wrote is exactly what I meant to write. This trading is not illegal. This trading is perfectly acceptable. The only people who seem to have a problem with this are a subset of the people who don't have the resources to do it. Frankly, the arguments I have read against it are mostly penned by ignorant folks who simply come across as jealous.
  - ynniv 17y ago
    > The only people who seem to have a problem with this are a subset of the people who don't have the resources to do it. That's likely true, since only a couple of firms can do it, and there are millions of people's interest in the markets. The NYTimes article this article pulls from specifically points out that these few firms are taking money out of the pockets of "slower" firms, like hedge funds. Given that a large number of people in the country have their retirement funds tied up in hedge funds, until someone shows otherwise, this is clearly the rich stealing from the poor. I understand that those in the industry have a different worldview, but try to see the bigger picture. The only difference between grossly immoral and illegal is a few years and a new law. If this isn't illegal, its because the population hasn't been sufficiently outraged. Yet.
    - BrentRitterbeck 17y ago
      I do see the bigger picture. I've worked in the industry, but I've moved myself outside the industry to go back to school. I do not feel in any manner that I am being stolen from. When I enter a trade as a retail investor, I accept that I don't have nearly as much information about my trade as I would like to have. I wouldn't walk onto an NFL field expecting them to change their ways simply because I can't bench 400 pounds.
      - ynniv 17y ago
        With due respect, this isn't about you, or me. It isn't your money (or mine, as I don't invest in the market) at stake here. Yes, financials are a competitive place to be, and you may have a great deal of humility as well as respect for those in the market. Like it or not, there will be a day of reckoning, when the average person will realize they are being had and take their money (aka "the leverage" that makes those commissions larger). That day will be much farther off if average people feel that they are being taken for less of a ride.
        BrentRitterbeck 17y ago
        What I'm about to say is not pleasant. It comes from working in several different parts of the industry. The greatest thing Wall Street sells is dreams. This will never go away. Every buy carries with it the thought that this one will go higher. Otherwise people wouldn't buy. As long as Wall Street continues to allow retail investors to play in the markets, there will be people who will come along for the ride. EDIT: Don't get mad at me for saying it. I think I'm doing people a favor by pointing this out. You won't hear this from many other people.
        joezydeco 17y ago
        Funny thing. I can swap "Wall Street" for "Las Vegas" in what you just said, and it reads exactly the same. It boils down to this, in my opinion: 1) The market is simply random. Every stock you buy is a bet placed on a roulette table. 2) Mutual funds, derivatives, etc are just ways of hiding the randomness. (Hey, why play at one roulette table when you can play at 1,000 at the same time! Less risk!) 3) Even if you do decide to take the plunge and buy in, the system is rigged against you. Much smarter people have figured out how to get theirs and get out before you know what's happened. The house always wins.
  - roc 17y ago
    I'm not putting words in your mouth; my bias goes under my username, which is as clearly visible as your original post. I don't 'have a problem' with automated trading. I'm just opining that frequency and legality, in and of themselves, are not compelling defenses. Imagine Party A says 'marijuana's awful' and party B says 'everyone's doing it, and it's technically legal because we all have glaucoma'. I'm pointing out --separate from whether I (dis)agree with A-- that party B isn't going to sway anyone with that approach.
    - BrentRitterbeck 17y ago
      I was not offering a defense. I was offering commentary. I thought that what I wrote would be more acceptable than simply saying that the author clearly doesn't understand finance or how Wall Street operates. Perhaps I should just go back to my usual sledge-hammer comments. At least my intentions are understood when I do that.

roc 17y ago

Call me jaded, but 'commonplace' and 'not technically illegal' don't strike me as a very compelling defense.

BrentRitterbeck 17y ago
Please don't try to interpret what I meant. What I wrote is exactly what I meant to write. This trading is not illegal. This trading is perfectly acceptable. The only people who seem to have a problem with this are a subset of the people who don't have the resources to do it. Frankly, the arguments I have read against it are mostly penned by ignorant folks who simply come across as jealous.
- ynniv 17y ago
  > The only people who seem to have a problem with this are a subset of the people who don't have the resources to do it. That's likely true, since only a couple of firms can do it, and there are millions of people's interest in the markets. The NYTimes article this article pulls from specifically points out that these few firms are taking money out of the pockets of "slower" firms, like hedge funds. Given that a large number of people in the country have their retirement funds tied up in hedge funds, until someone shows otherwise, this is clearly the rich stealing from the poor. I understand that those in the industry have a different worldview, but try to see the bigger picture. The only difference between grossly immoral and illegal is a few years and a new law. If this isn't illegal, its because the population hasn't been sufficiently outraged. Yet.
  - BrentRitterbeck 17y ago
    I do see the bigger picture. I've worked in the industry, but I've moved myself outside the industry to go back to school. I do not feel in any manner that I am being stolen from. When I enter a trade as a retail investor, I accept that I don't have nearly as much information about my trade as I would like to have. I wouldn't walk onto an NFL field expecting them to change their ways simply because I can't bench 400 pounds.
    - ynniv 17y ago
      With due respect, this isn't about you, or me. It isn't your money (or mine, as I don't invest in the market) at stake here. Yes, financials are a competitive place to be, and you may have a great deal of humility as well as respect for those in the market. Like it or not, there will be a day of reckoning, when the average person will realize they are being had and take their money (aka "the leverage" that makes those commissions larger). That day will be much farther off if average people feel that they are being taken for less of a ride.
      - BrentRitterbeck 17y ago
        What I'm about to say is not pleasant. It comes from working in several different parts of the industry. The greatest thing Wall Street sells is dreams. This will never go away. Every buy carries with it the thought that this one will go higher. Otherwise people wouldn't buy. As long as Wall Street continues to allow retail investors to play in the markets, there will be people who will come along for the ride. EDIT: Don't get mad at me for saying it. I think I'm doing people a favor by pointing this out. You won't hear this from many other people.
        joezydeco 17y ago
        Funny thing. I can swap "Wall Street" for "Las Vegas" in what you just said, and it reads exactly the same. It boils down to this, in my opinion: 1) The market is simply random. Every stock you buy is a bet placed on a roulette table. 2) Mutual funds, derivatives, etc are just ways of hiding the randomness. (Hey, why play at one roulette table when you can play at 1,000 at the same time! Less risk!) 3) Even if you do decide to take the plunge and buy in, the system is rigged against you. Much smarter people have figured out how to get theirs and get out before you know what's happened. The house always wins.
- roc 17y ago
  I'm not putting words in your mouth; my bias goes under my username, which is as clearly visible as your original post. I don't 'have a problem' with automated trading. I'm just opining that frequency and legality, in and of themselves, are not compelling defenses. Imagine Party A says 'marijuana's awful' and party B says 'everyone's doing it, and it's technically legal because we all have glaucoma'. I'm pointing out --separate from whether I (dis)agree with A-- that party B isn't going to sway anyone with that approach.
  - BrentRitterbeck 17y ago
    I was not offering a defense. I was offering commentary. I thought that what I wrote would be more acceptable than simply saying that the author clearly doesn't understand finance or how Wall Street operates. Perhaps I should just go back to my usual sledge-hammer comments. At least my intentions are understood when I do that.