Congratulations to Lewis. Well done. But THOR is no surprise -- it was revealed in 2011.
And okay, HFT is technologically complex but the tactic is as simple as scalping. It's quite similar to games being played by, and with, Ticketmaster.
2009
Message 25818775
Message 25817241
Message 25816857
Message 25808364
Message 25775803
2010
Message 26634980
Message 26681504
Message 26724791
Message 26724955 ** SCALPING
Message 26726307
Message 26727296
Message 26727855
Message 26738637
Message 26738673
Message 26738800 *** MSM
Message 26783753
Message 26819309
Message 26820242 *** RISK AGAIN
Message 26822065
Message 26824949
Message 26826613
Message 26862421
Message 26864252
Message 26892126
Message 26892148
Message 26900492
Message 26922271
2011
Message 26929958
Message 27098180 *** THOR
Message 27098585
Message 27182215 *** INCENTIVIZE
Message 27246260
Message 27366843
Message 27498427
Message 27523615
Message 27528539
Message 27643780 *** TRANSACTION COST
Message 27643814
Message 27644536
Message 27644930
Message 27645092
Message 27647858 *** MORE RISK
Message 27721043
Message 27780366
Message 28289551 *** ENERGY MARKETS
2012
Message 28308511
Message 28377161
Message 28384886 *** BUYING DATA
Message 28389851 ***LOW RISK/EASYMONEY
Message 28470367
Message 28473808 *** EFFECT OF THOR?
2013
Message 28828164
2014
Message 29467453
Message 29467583
~~~
Remember:
(A) The time and the context of HFT. It flourished as the political manifestations of neoliberalism spread to deregulation, de-funding of regulatory agencies, and their consequent weakness, compounded by regulatory capture. Not to mention the growth of the financial sector, with unprecedented lobbying, financial contributions and Beltway influence.
(B) The consequences, visible in stories like the one about GS trading a whole quarter without a loss. How about Virtu? One trading day loss in 1238! Any trader will tell you that's statistically impossible - or to put it another way, it's not "trading" at all. It's certainly not "investing". Multiply those profits across 'X' number of participants, and you begin to understand there's a multibillion-dollar skim running, every day. Lest we forget, it's global.
(C) The volumetric change in market participation ratios. Very public complaints and withdrawal -- by mistrusting investors, especially after the Flash Crash.
Many other regulatory changes occurred at roughly the same time. Stock exchanges went public, and co-dependent relationships evolved between HFT firms and exchanges.
Meanwhile a forest of practices grew in the sector: momentum ignition, order anticipation, layering, quote stuffing, order book fading, and so on. Not to mention publicly-acknowldeged leaking of material information for profit, to a select few.
~~~
Be aware that change didn't come from Beltway legislators. It didn't come from regulators. It didn't come from agencies, the judiciary or law enforcement. It didn't come from anybody whose duty it was to maintain equitable conduct in markets. Stakeholders -- the public, the economy, the nation -- be damned. Those responsible didn't have the balls to stand up and say, "This is wrong. We won't allow it."
There was no evidence -- absolutely none -- that responsible actors would make any changes, beyond cosmetic. I've been following the dog-and-pony show for years. Quite simply, they were too corrupt. Bought. Almost all of them. Intentionally blind to what was ultimately bad for the system, but good for them.
So in a sense, the success and growth of "ethical" HFT isn't much of a victory. Because it occurs in spite of legislators, agencies and institutions who were not and are not prepared to do a damned thing, as long as they get their cut from the take.
Jim
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