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>many of them are opposed to HFT. Remind me which of those banks are calling for it to be strictly regulated or prohibited? I've heard that some banks are now

>many of them are opposed to HFT. Remind me which of those banks are calling for it to be strictly regulated or prohibited? I've heard that some banks are now selling "protection" against HFT sharks in the form of dark pools (which is often not really protection at all - see Barclays). Bearing that in mind I can't imagine that it would hurt for them to put out a marketing message that is disdainful of the practice while still quietly engaging in it.

rayiner 12y ago
Goldman Sachs: http://www.washingtonpost.com/news/volokh-conspiracy/wp/2014/04/06/should-high-frequency-trading-be-regulated http://www.washingtonpost.com/news/volokh-conspiracy/wp/2014...
- crdoconnor 12y ago
  They're under investigation for fraud relating to HFT: http://dealbook.nytimes.com/2014/05/09/goldman-under-investigation-for-high-speed-trading/ http://dealbook.nytimes.com/2014/05/09/goldman-under-investi... I imagine that WSJ op ed is probably damage control.
  - rayiner 12y ago
    I don't see your point. It's entirely consistent to say that restrictions on HFT would be in Goldman's interests, but until those are in place, they make some money engaging in HFT. In other words, the advantages to Goldman of restricting HFT (which hurts its major business line of trading on information advantages) would be worth more than losing whatever little HFT revenue they make (they're not a major player).
kasey_junk 12y ago
When you say HFT sharks, what do you mean? What practice are you describing. The reason that this is important is that the range and scope of electronic/algorithmic trading is highly varied. Saying you are against HFT can mean that you are against a wide variety of things.
yummyfajitas 12y ago
You might like to read Matt Levine's article on Barclays. Choice quote: Barclays, like other dark pool operators, knew this: that you can run a pristine dark pool without "predatory" high frequency traders, and without much trading, or you can run a useful dark pool with high-frequency traders. http://www.bloombergview.com/articles/2014-06-26/barclays-not-smart http://www.bloombergview.com/articles/2014-06-26/barclays-no... tl;dr; No HFT, no liquidity, and people who want to trade take their business elsewhere. [edit: If Barclays didn't need to bring HFTs in to provide liquidity, why did they subsidize HFTs? Matt Levine crunches the numbers - the biggest HFTs paid Barclays about $3M assuming a wild overestimate of the amount of liquidity they take, compared to institutional investors paying $4B.]
- crdoconnor 12y ago
  You do not need to sell privileged access to HFTs to your dark pool of institutional investors in order to have liquidity. Barclays were ripping off their clients. It wasn't even a complicated scam.
  - kasey_junk 12y ago
    "You do not need to sell privileged access to HFTs to your dark pool of institutional investors in order to have liquidity." Except that is untrue historically. The reason dark pools sell that privileged access is that they can't provide liquidity any other way and their clients find it better to trade in HFT allowed environments than in ones without liquidity. IEX is trying something new, driving liquidity via scare tactics and publicity but we still don't know how that will work out. "Barclays were ripping off their clients. It wasn't even a complicated scam." Barclay's lied about allowing HFT firms into their dark pool. That is fraud but it has nothing to do with bad behavior on the part of the HFT. If you are suggesting that dark pools have inherent conflicts of interest that might be a more valid argument than "HFT IS THE EVILS"
    - crdoconnor 12y ago
      >Except that is untrue historically. Historically there was no HFT. Historically we have managed to have liquidity without it. Historically, the thing that brought us the greatest liquidity (something that is useful but vastly overrated) in the equities markets is electronic trading. >The reason dark pools sell that privileged access is that they can't provide liquidity I think it's cute the way that you're pretending that they were doing their investors a favor. They were selling dark pools to investors because investors WANTED to get away from HFT. If they wanted HFT infested waters they could have traded on the public markets! What the fuck do you think they were DOING there in the first place? They happily sacrificed a sliver of extra (and largely unnecessary) liquidity for the chance to not get ripped off.

rayiner 12y ago

Goldman Sachs: http://www.washingtonpost.com/news/volokh-conspiracy/wp/2014/04/06/should-high-frequency-trading-be-regulated http://www.washingtonpost.com/news/volokh-conspiracy/wp/2014...

crdoconnor 12y ago
They're under investigation for fraud relating to HFT: http://dealbook.nytimes.com/2014/05/09/goldman-under-investigation-for-high-speed-trading/ http://dealbook.nytimes.com/2014/05/09/goldman-under-investi... I imagine that WSJ op ed is probably damage control.
- rayiner 12y ago
  I don't see your point. It's entirely consistent to say that restrictions on HFT would be in Goldman's interests, but until those are in place, they make some money engaging in HFT. In other words, the advantages to Goldman of restricting HFT (which hurts its major business line of trading on information advantages) would be worth more than losing whatever little HFT revenue they make (they're not a major player).

kasey_junk 12y ago

When you say HFT sharks, what do you mean? What practice are you describing. The reason that this is important is that the range and scope of electronic/algorithmic trading is highly varied. Saying you are against HFT can mean that you are against a wide variety of things.

yummyfajitas 12y ago

You might like to read Matt Levine's article on Barclays. Choice quote: Barclays, like other dark pool operators, knew this: that you can run a pristine dark pool without "predatory" high frequency traders, and without much trading, or you can run a useful dark pool with high-frequency traders. http://www.bloombergview.com/articles/2014-06-26/barclays-not-smart http://www.bloombergview.com/articles/2014-06-26/barclays-no... tl;dr; No HFT, no liquidity, and people who want to trade take their business elsewhere. [edit: If Barclays didn't need to bring HFTs in to provide liquidity, why did they subsidize HFTs? Matt Levine crunches the numbers - the biggest HFTs paid Barclays about $3M assuming a wild overestimate of the amount of liquidity they take, compared to institutional investors paying $4B.]

crdoconnor 12y ago
You do not need to sell privileged access to HFTs to your dark pool of institutional investors in order to have liquidity. Barclays were ripping off their clients. It wasn't even a complicated scam.
- kasey_junk 12y ago
  "You do not need to sell privileged access to HFTs to your dark pool of institutional investors in order to have liquidity." Except that is untrue historically. The reason dark pools sell that privileged access is that they can't provide liquidity any other way and their clients find it better to trade in HFT allowed environments than in ones without liquidity. IEX is trying something new, driving liquidity via scare tactics and publicity but we still don't know how that will work out. "Barclays were ripping off their clients. It wasn't even a complicated scam." Barclay's lied about allowing HFT firms into their dark pool. That is fraud but it has nothing to do with bad behavior on the part of the HFT. If you are suggesting that dark pools have inherent conflicts of interest that might be a more valid argument than "HFT IS THE EVILS"
  - crdoconnor 12y ago
    >Except that is untrue historically. Historically there was no HFT. Historically we have managed to have liquidity without it. Historically, the thing that brought us the greatest liquidity (something that is useful but vastly overrated) in the equities markets is electronic trading. >The reason dark pools sell that privileged access is that they can't provide liquidity I think it's cute the way that you're pretending that they were doing their investors a favor. They were selling dark pools to investors because investors WANTED to get away from HFT. If they wanted HFT infested waters they could have traded on the public markets! What the fuck do you think they were DOING there in the first place? They happily sacrificed a sliver of extra (and largely unnecessary) liquidity for the chance to not get ripped off.