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Technology Stocks : The *NEW* Frank Coluccio Technology Forum -- Ignore unavailable to you. Want to Upgrade?

To: aladin who wrote (35677)	9/14/2010 6:47:05 PM
From: Frank A. Coluccio	Respond to of 46821

[Opinion] If you can't afford the tech, get out of the market Financial Services Club Blog \| September 10, 2010 More on the Deutsche Börse open day and this time it’s the impact of algo news. Most of you will know about algo trading. If you don’t, it’s just a fancy way of saying automated trading and if you checkout the stats, 80% of trading in London is automated today compared to just 40% four years ago and virtually none a decade ago. So algorithmic trading – the automation of trading strategies such that they run all day on machines whilst people work out tomorrow’s trading strategies – is the de facto way of trading these days. It is the reason why Chi-X has jumped from zero to hero since MiFID allowed new exchanges to enter the European markets, and why BATS now gets over ten percent of US equities trading. This is good. Or some say it’s bad. Either way it’s different. Then along come algorithmic newsfeeds. What are they? Well, there’s quite a few with Elementized from Dow Jones, NewsScope Direct from Thomson Reuters, BN Direct from Bloomberg and a few others. Deutsche Börse has one as well, called AlphaFlash. AlphaFlash is their low latency algo newsfeed, and it delivers more than 150 market moving indicators and releases from around the globe. The data covers mainly North American and European markets, although further expansion is planned with Chinese indicators in beta testing. Cont.: thefinanser.co.uk ------

To: aladin who wrote (35677)	9/14/2010 7:33:48 PM
From: Maurice Winn	1 Recommendation Read Replies (1) \| Respond to of 46821

I like a good panic, but I can't get worked up with fear: <after discussions with a number of insiders I am inclined to be much more supportive. HFT has driven the average hold time for some symbols to less than a minute - one symbol was so highly traded its average hold time was down to 17 seconds. I cannot find any published reports on this, but it is indeed scary. > If somebody has a cheap broker and they can do trades at a million miles a minute, I don't see why I have to worry about it. I come trundling along at 4 km per hour, plonk my order on the table and some million mile a minute computers grab it and race around the block fifty times buying and selling then a minute or two later, my order is filled as requested at the price I specify. Or I have to wait until my price is reached while the computers all roar around clearing the market flat out before grabbing my order. How do I get hurt other than missing out on the market clearing action of the swarms of orders which is not what I'm trying to do. That's what I pay them to do - wade through all the orders and fill them all flat out. I'm happy that they do it really quickly and effectively. Regarding the Flash Crash, that was obviously a bunch of computer programmes fighting each other, playing chicken, seeing who was best able to place bets correctly, which computers had the best mathematicians and the best programmers and the best financiers backing them. It was no skin off my nose. On the contrary, it was an opportunity. If I had been wanting to buy one of the Flash Crash stocks, I'd have been happy to buy from one of those million mile a minute computers. My plan was to put in some low priced orders and hope for another duel to the death between some million mile a minute computers. But the officials who were bewildered by the whole thing and apparently can't understand why the Flash Crash happens cancel trades arbitrarily so they would rob me after the fact. Therefore I have to not put in my low-priced buy orders so, as usual, the dopey government people mess things up by making the thing they are trying to prevent even worse. The computers will have to go even lower to find somebody willing to place bets against not just the million mile a minute computers but the people who want to stop people buying and selling at market prices, canceling trades arbitrarily and handing profits to those who can figure out what the authorities will do or have friends in the right places who will not cancel their particular trades. The problem is the authorities worried about Flash Crashes, not the million mile a minute computers. Why should I worry about the million mile a minute computers, sitting right beside the trading "desk" for limited latency? Why is it scary? Mqurice

To: aladin who wrote (35677)	10/29/2010 5:50:41 AM
From: axial	Read Replies (2) \| Respond to of 46821

John, widely-accepted HFT stats are being corrected. No, Average Stock Holding Period Is Not 11 Seconds "Conclusion: The 11 second number is wrong. There is no data supporting that. Estimates of HFT of 70% of trade volume are just that — estimates — and we have no evidenciary [sic] proof or data that HFT trade volumes are 70% . . ." ritholtz.com Against this corrected data, we still have a range of contradictory information from different experts and practitioners, inside and outside HFT. CFTC takes aim at "runaway robotic trades: Chilton "Bart Chilton, a commissioner with the futures regulator, said "mini-flash crashes occur all too often" following a surge in high-frequency trading. Securities and futures regulators have been trying to determine ways to prevent another event like the May 6 "flash crash" when markets temporarily plunged. The CFTC on Tuesday will unveil new draft rules to clamp down on disruptive trading practices. "They don't cause as much of a disruption as that of May 6, but more than once this year, runaway algos have disrupted markets. By that I mean, cost people money," Chilton said in prepared remarks for an energy conference in Las Vegas. "We should explore ways to hold those who set off runaway robotic trades accountable," he said. At least one algorithm is know to have disrupted the oil markets this year. Infinium Capital Management said in August it was the company at the center of a six-month probe by CME Group Inc into why a new trading program malfunctioned, racking up a million-dollar loss in about a second on February 3." reuters.com Jim