Re: High frequency trading - financial spam that does make a profit?

["Tomas L. Byrnes" <tomb () byrneit net>]

Trading is a fools game if you aren't in the pit, it always has been. If
you're investing, flash trading doesn't matter, as you aren't timing
your buy, but making a fundamental decision.

This is yet another example of why you should buy ETFs or individual
stocks, for extended holding periods, as opposed to invest in any
actively traded pool, and explains who over 80% of money managers
underperform the S&P 500.



> -----Original Message-----
> From: funsec-bounces () linuxbox org [mailto:funsec-bounces () linuxbox org]
> On Behalf Of Rob, grandpa of Ryan, Trevor, Devon & Hannah
> Sent: Thursday, August 06, 2009 9:47 PM
> To: funsec () linuxbox org
> Subject: [funsec] High frequency trading - financial spam that does
make
> aprofit?
>
> Stock traders with faster computers are at an advantage, and can
> manipulate the
> stock market.
>
> http://www.nytimes.com/2009/07/24/business/24trading.html
>
> "The slower traders began issuing buy orders. But rather than being
> shown to all
> potential sellers at the same time, some of those orders were most
> likely routed to
> a collection of high-frequency traders for just 30 milliseconds - 0.03
> seconds -
> in what are known as flash orders. While markets are supposed to ensure
> transparency by showing orders to everyone simultaneously, a loophole
in
> regulations allows marketplaces like Nasdaq to show traders some orders
> ahead of
> everyone else in exchange for a fee.
>
> "In less than half a second, high-frequency traders gained a valuable
> insight: the
> hunger for Broadcom was growing. Their computers began buying up
> Broadcom
> shares and then reselling them to the slower investors at higher
prices.
> The overall
> price of Broadcom began to rise.
>
> "Soon, thousands of orders began flooding the markets as high-frequency
> software
> went into high gear. Automatic programs began issuing and canceling
tiny
> orders
> within milliseconds to determine how much the slower traders were
> willing to
> pay."
>
> I've often said that the stock market was a casino.  I was wrong.
> Casinos take
> great care that people with faster computers can't manipulate them ...
>
> ======================  (quote inserted randomly by Pegasus Mailer)
> rslade () vcn bc ca     slade () victoria tc ca     rslade () computercrime org
>   Given the estimated mass and Schwarzschild radius of the known
>   universe, we inhabit a black hole.  This would explain a lot
>   about user behaviour.                                       - rms
> http://victoria.tc.ca/techrev/rms.htm
> http://blog.isc2.org/isc2_blog/slade/index.html
> http://twitter.com/rslade
> http://blogs.securiteam.com/index.php/archives/author/p1/
> http://twitter.com/NoticeBored
>
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