SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Zman Market Timing
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
From: JuniorSeau10/23/2013 12:14:17 AM
1 Recommendation

Recommended By
Fintas

   of 15903
 
OT: Interesting comments on HFT trading and liquidity

market-ticker.org

Quick Note On Liquidity And Netflix

Think about this one folks.

I have repeatedly warned, going back years (indeed, close to the start of this column) that if two computers trade 1,000 shares between them 1,000 times that is not 10 million shares of liquidity -- it is 1,000 shares!

You saw that today in Netflix; Icahn sold a couple of million shares and hammered the price by ~20%.

This is why HFT is not only ridiculous but dangerous and damn well ought to be banned or at least segregated and removed from the volume prints as otherwise it presents anintentionally false view, massively inflated, of exactly how much liquidity is (or isn't, in this case) in the market.

If you're long stocks in this market you had better think about this long and hard tonight. When there is no actual liquidity because the entire market is computers handing shares back and forth across the table if any actual sellers show up price collapses as that 1,000 shares is instantly consumed and there are in fact no more shares available under them!

Yes, including the price of what you own.

Sleep well tonight folks......
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News