San Diego unions push transaction tax

Not to beat a dead horse but insider trading is also allowed for members of congress, and their average returns show it, with Democrats making a statistically significant number of basis points better than their Republican counterparts. Draw whatever conclusions you want. http://insidertrading.procon.org/view.resource.ph…
— September 26, 2011 7:55 a.m.

San Diego unions push transaction tax

Great article for those interested in a more philosophical bent regarding markets, HFT, and discussing why the market price is an illusion(something I've known for 35 years incidentally.) Great article. http://seekingalpha.com/article/231921-why-the-ma…
— September 26, 2011 7:36 a.m.

San Diego unions push transaction tax

Don, why don't you tell the whole story instead of just a half truth?
— September 26, 2011 6:02 a.m.

San Diego unions push transaction tax

Actually Fred, you're not completely correct in your assessment of HFT providing nothing. HFT's create liquidity, and with the exiting of most of the specialist firms, they are there to take the other side of your trade if you decide to sell 500 shares that your Grandma left you. In fact, HFT firms provide so much liquidity that they get liquidity rebates from the exchanges for performing this service.
— September 26, 2011 6:01 a.m.

San Diego unions push transaction tax

Don, have you noticed that every stock market disruption, panic, etc since 1812 was caused by a government action in one way or another? I love to study the history of market dislocations and I'm surprised how the state usually benefits one way or another after a disruption. Refriedgringo is right in his assessment by the way. Look at the biggest percentage period of US growth from 1866-1908. No Fed, no federal income tax, no SEC, in fact the average citizen never had to deal with the federal government in their lives. Now, people accept these institutions because they are told by the media that they need them.
— September 26, 2011 5:56 a.m.

San Diego unions push transaction tax

Don, not all front running is illegal. You obviously are not acquainted with how a specialist works and the rules they have to go by. Sometimes a specialist has to front run in order to cross a large order, and this is not illegal, nor is it considered insider trading. Same thing happens in the options pits on a daily basis in order to cross complicated straddles, strangles, condors or whatever and none of it is illegal. Front running is also allowed in the currency markets when sometimes the bank is crossing a complicated currency swap. Not all front running is insider trading, and if you actually study how HFT systems work, really drill down instead of touting the populist line, you will find that they are "At Risk" during the duration of the trade.
— September 26, 2011 5:48 a.m.

San Diego unions push transaction tax

Fred, if you want a HFT system, you can be up and running within 24 hours. Right now I know of at least 5 people that are leasing space on co-located servers right next to the exchange server, and they're pretty reasonable lease rates at $50K per month. You can find decent HFT programs, plus spoofs and anything else you want, here. http://www.opensourcetrader.com/ You'd need about a million dollars of capital to kick it off, but with leverage that should give you pretty good bang for the buck. Not all front running is illegal. When I was in the pit, I used to know whether the pit broker was going to buy or sell just by looking at the movement of his eyes, and I could get him to bid up or offer down...Is that front running? Plus, people pay big money to buy seats on exchanges in order to get first crack at the orders coming in...is this wrong? All the people I know running HFT's are pretty sagacious individuals...the algo is merely a tool used by a sagacious individual to extract money from the market.
— September 26, 2011 5:42 a.m.

San Diego unions push transaction tax

Surfpuppy, Actually my proprietary trading secrets have made money every year since 1978 with only 1982 returning single digit returns. As far as secrets go, they're really not secrets, just a good, disciplined system using multivariate analysis combined with Bayesian statistics and a few other things thrown in for good measure.You could probably do the same thing if you were able to add about 50 points to your IQ. As far as billionaire...no way as my methods are hamstrung by government imposed position limits for speculators in the wheat market, which is my forte. Funny thing about that Forbes list, I was discussing that list with a friend who's on the list. He said that he knew many people who should be near the top of the list who weren't even mentioned. Those people are all big currency traders who exist in the shadows of the financial arena. Most really big independent currency speculators live in places like Monte Carlo, Hong Kong, and the Algarve, and regularly do 40-50 billion dollar trades(even leveraged one must still come up with 3-4 billion to get the trade down.) But then again, just because someone isn't a billionaire doesn't mean that they aren't successful in the markets and don't make their daily bread from the markets. Both Puppy and Don are just taking cheap shots...which is OK by me.
— September 26, 2011 5:30 a.m.

San Diego unions push transaction tax

Don, you said, "Frankly, nothing would be more desirable for financial stability than the mass extinction of these predators. High-frequency traders, aided by fast-calculating computers, hold a position for minutes, or often seconds. They will make thousands of trades daily, usually ending the day with a zero balance." Since specialists have gone to the wayside, HF traders have created a bulk of the liquidity in addition to their volume. You refer to them as predators, I refer to them as sagacious individuals who are making money. I guess because they make a lot of money they are predators...does that apply to everyone who consistently makes money in all market conditions? I remember when I was a local at the CBOT, people said the same thing about me being a predator because I had first crack at the inside market. That's why people buy seats on exchanges, so they can get first crack at the inside market, and there is noi reason for exchange members to be altruistic. I guess I am a predator because I paid for a seat and consistently make money whether the market goes up, down...it doesn't matter as long as it moves and I'm on the right side. It's still a free country and anyone is allowed to set up their own high frequency trading operation. The HFT guys should be applauded for a job well done, advancing technology, and beating everyone else to the punch.
— September 23, 2011 3:47 a.m.

Curse Of The Gypsies

Great article:)
— September 4, 2011 5:59 p.m.