Kirk's Market Thoughts Message Board

STOCKTALK

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.

Non-Tech : Kirk's Market Thoughts

COHR 197.65

+2.5%

Dec 10 3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

Recommended by:

Hawkmoon

To: Gottfried who wrote (1015)	4/4/2014 3:51:50 PM
From: Kirk ©	1 Recommendation Read Replies (1) of 26758

The best on HFT problem I read is Mark Cuban's blog condensed on Seeking Alpha. Sorry, I didn't save the link. He hates it. The way I look at it, the profits it sucks out comes from the total market cap of the market.... since HFT they talk about is used only for the largest stocks, just look at the S&P500. Any idea what the total market cap of it is? A quick search says it passed $15T last year cnbc.com So lets assume they suck off $10B a year in profits from HFT. As a percentage, it is $10B/$15,000Bx100% = 0.067% That is on par with the expense ratios for the SPY ETF which is 0.09%... so it roughly doubles the cost of owning the fund. finance.yahoo.com Schwab I believe has a lower expense ratio for its S&P500 fund but I hear it gets that for rebates for order flow plus fees earned on lending the securities to shorts, etc... Anyway, the cost is not zero and there are other ways to make money besides HFT that I believe takes even more money out, very similar to letting n go to infinity on my method of riding the waves for added return... see " Using Asset Allocation to make money in a Flat Market." I believe some even cause waves with their programs so they can profit from the automatic buy and sell programs... which should be illegal but since I figured out how to do it, I am sure some do it for big bucks that are not even discussed as they want to remain stealth.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next