2 ms·

>They thought they wanted to get away from HFT. But once they were away from HFT they realized THEY WERE PAYING TO BE IN A DARK POOL IN THE FIRST PLACE BECAUSE

>They thought they wanted to get away from HFT. But once they were away from HFT they realized THEY WERE PAYING TO BE IN A DARK POOL IN THE FIRST PLACE BECAUSE THEY WANTED TO BE AWAY FROM HFT. There was no "they realized". Once they got away, Barclays tried to figure out if there was any BARCLAYS could extract more profits from these dark pools than the fees they were already paid. There was: allow HFT sharks to take advantage of their customers and collect fees for letting them do so. If what you said were true (and frankly I cannot possibly see how you could believe it) they would have ZERO reason to commit fraud and lie about selling privileged access to HFT traders.

kasey_junk 12y ago
"Once they got away they did NOT start whinging that there was not enough liquidity." Of course they didn't. Professional market participants don't whinge. They go to venues that provide the services they want, namely cheap liquidity. Those venues were ones that allowed HFT market makers. When you say "they got away", you do know that those market participants moved to open exchanges where HFTs "run rampant" and stopped paying Barclay's for their service. "allow HFT sharks to take advantage of their customers and collect payment for letting them do so." A) what do you mean when you say HFT shark? You keep using that term, in what I assume is a pejorative but it doesn't mean anything. B) If the point was extracting more fees why did Barclay's subsidize HFT trading? They charged HFTs an order of magnitude less than their clients, that was a central part of the complain. If it was an example of allowing advantage taking, wouldn't the fee structure be reversed? That is, if I have a chance to fleece someone, wouldn't I pay up for that instead of require payment for it? "If what you said were true they would have no reason to lie" Of course they had a reason to lie. They claimed that they could provide a high liquidity environment without letting market makers trade in their dark pool, despite the overwhelming historical evidence to the contrary. Admitting that they were wrong brings their whole value proposition to buy side investors into question and delegitimizes their dark pool.
- crdoconnor 12y ago
  >Of course they didn't. Professional market participants don't whinge. They go to venues that provide the services they want, namely cheap liquidity. If they prioritized liquidity above all else, as you appear to think they should, they wouldn't be using a dark pool in the first place. They would have been using a public exchange. >When you say "they got away", you do know that those market participants moved to open exchanges where HFTs "run rampant" and stopped paying Barclay's for their service. Yes, I'm sure they all left after it was revealed that Barclays was lying to them and allowing HFT predation on their trading activity. >what do you mean when you say HFT shark? An HFT trader that parasitically extracts value from a non-HFT traders - often institutional investors (e.g. pension funds) putting through large orders. The link I put below describing a 'whale' to you explains just one parasitic strategy. >If the point was extracting more fees why did Barclay's subsidize HFT trading? They charged HFTs an order of magnitude less than their clients A) Subsidizing != Charging lower fees B) Citation, please (that OVERALL fees were higher, not just fees per trade - HFT will obviously get bulk discounts). >that was a central part of the complain. The central part of the complaint was that the service was advertised as HFT free when, in fact, it was not. The marketing literature is all out there saying this.
  - kasey_junk 12y ago
    "If they prioritized liquidity above all else, as you appear to think they should" No, I think they should prioritize execution costs above all else. It turns out that fees then liquidity costs are the biggest variables in determining execution cost. Public exchanges with low fees and high liquidity provide the lowest execution cost, no matter what the dark pool salesmen claim (fraudulently or not). "Yes, I'm sure they all left after it was revealed that Barclays was lying to them" Actually the complaint shows they were leaving before the lying started. This is what you are missing. The lying was a response to the natural market condition that execution costs are lowered in environments with HFT participants. That Barclay's had staked their reputation on that not being true is what led to the fraud. "The central part of the complaint was that the service was advertised as HFT free when, in fact, it was not." And that is fraud. The book should be thrown at Barcaly's but that doesn't add any insight into the arguments surrounding HFT, other than in real world conditions, even buy side clients prefer venues with HFT provided liquidity, even in the face of fraudulent marketing claims.

kasey_junk 12y ago

"Once they got away they did NOT start whinging that there was not enough liquidity." Of course they didn't. Professional market participants don't whinge. They go to venues that provide the services they want, namely cheap liquidity. Those venues were ones that allowed HFT market makers. When you say "they got away", you do know that those market participants moved to open exchanges where HFTs "run rampant" and stopped paying Barclay's for their service. "allow HFT sharks to take advantage of their customers and collect payment for letting them do so." A) what do you mean when you say HFT shark? You keep using that term, in what I assume is a pejorative but it doesn't mean anything. B) If the point was extracting more fees why did Barclay's subsidize HFT trading? They charged HFTs an order of magnitude less than their clients, that was a central part of the complain. If it was an example of allowing advantage taking, wouldn't the fee structure be reversed? That is, if I have a chance to fleece someone, wouldn't I pay up for that instead of require payment for it? "If what you said were true they would have no reason to lie" Of course they had a reason to lie. They claimed that they could provide a high liquidity environment without letting market makers trade in their dark pool, despite the overwhelming historical evidence to the contrary. Admitting that they were wrong brings their whole value proposition to buy side investors into question and delegitimizes their dark pool.

crdoconnor 12y ago
>Of course they didn't. Professional market participants don't whinge. They go to venues that provide the services they want, namely cheap liquidity. If they prioritized liquidity above all else, as you appear to think they should, they wouldn't be using a dark pool in the first place. They would have been using a public exchange. >When you say "they got away", you do know that those market participants moved to open exchanges where HFTs "run rampant" and stopped paying Barclay's for their service. Yes, I'm sure they all left after it was revealed that Barclays was lying to them and allowing HFT predation on their trading activity. >what do you mean when you say HFT shark? An HFT trader that parasitically extracts value from a non-HFT traders - often institutional investors (e.g. pension funds) putting through large orders. The link I put below describing a 'whale' to you explains just one parasitic strategy. >If the point was extracting more fees why did Barclay's subsidize HFT trading? They charged HFTs an order of magnitude less than their clients A) Subsidizing != Charging lower fees B) Citation, please (that OVERALL fees were higher, not just fees per trade - HFT will obviously get bulk discounts). >that was a central part of the complain. The central part of the complaint was that the service was advertised as HFT free when, in fact, it was not. The marketing literature is all out there saying this.
- kasey_junk 12y ago
  "If they prioritized liquidity above all else, as you appear to think they should" No, I think they should prioritize execution costs above all else. It turns out that fees then liquidity costs are the biggest variables in determining execution cost. Public exchanges with low fees and high liquidity provide the lowest execution cost, no matter what the dark pool salesmen claim (fraudulently or not). "Yes, I'm sure they all left after it was revealed that Barclays was lying to them" Actually the complaint shows they were leaving before the lying started. This is what you are missing. The lying was a response to the natural market condition that execution costs are lowered in environments with HFT participants. That Barclay's had staked their reputation on that not being true is what led to the fraud. "The central part of the complaint was that the service was advertised as HFT free when, in fact, it was not." And that is fraud. The book should be thrown at Barcaly's but that doesn't add any insight into the arguments surrounding HFT, other than in real world conditions, even buy side clients prefer venues with HFT provided liquidity, even in the face of fraudulent marketing claims.