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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 408.76

+2.6%

Jan 5 4:00 PM EST

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To: carranza2 who wrote (105479)	4/8/2014 3:33:23 PM
From: Maurice Winn	of 219017

Whatever C2. Flash crashes are not a problem, they are a solution to the need for price discovery [economic jargon]. Front running isn't a problem either. If I put a sell order in at some price and the HFT sees my order arrive, then they spot a buy order at a slightly higher price, they really quickly sell to that buyer at the higher price and buy my shares at the price I offer, making a gain on the trade. As in any market, there are traders who find buyers and sellers. The fast ones get the business. The old days of huge spreads between buy and sell prices have gone thanks to all these computers working constantly at supersonic million mile a minute speed. Insider trading is something else. The HFTs have no special source. Somebody has to tell them the information on which to trade. On the contrary: <The flashers are building systemic complexity into the markets. > They are taking it out. They remove Stop Loss orders, they clear margin-traders who have excessive risk. They reduce the markets to the simple task of price discovery and market clearing. It's the authorities who arbitrarily cancel trades they dislike who are building fatal systemic complexity into the markets. I was planning on going HTF hunting but the authorities forced me out of the business by threatening to cancel my trades [they did cancel trades in the Flash Crash]. Such systemic complexity as second-guessing authorities is too complex. I hope for such a flash crash: <You may call it great fun when a real market crash ensues when the risks HFT creates materialize but I doubt that the public will agree with you.> HFT doesn't create a risk. All they can do is mis-price shares. If they do that, they'll be selling them to me, or more likely, Warren Buffett. The public is clueless. That's why they borrowed huge amounts of money to buy houses at twice their real value. If the public wants to sell me their shares because some HFT made them scared, that's up to them and again, shows they are clueless. If some HFT tomorrow tells me my QCOM is worth only half what I think, then I won't sell them my shares, I'll buy those they are offering. Where's the risk you are concerned about? Mqurice

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