Silicon Investor (SI) -- The First Internet Community

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.

Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (105469)	4/8/2014 1:49:23 AM
From: carranza2	1 Recommendation Recommended By Hawkmoon Read Replies (1) \| Respond to of 217618

Not surprised that HFT, which is a fascinating subject, has not been very interesting to retail investors. When one suffers death by a million cuts, one or two make no difference. I'm guessing, but it would not surprise me one bit if some motivated rebels were to hack into the HFTers networks or somehow physically hinder the operation of the microwave towers, which would be simplicity itself.

To: carranza2 who wrote (105469)	4/8/2014 3:21:58 AM
From: Maurice Winn	Read Replies (3) \| Respond to of 217618

HFT and the algorithm traders are good guys in my book. They have cracked the old boys club of floor traders and swindling. Now, I can confidently decide what price I'll accept, then dump my stock on the market for people to consider and decide whether to buy. If they accept my price, that's good, if they don't, then that's good too. First one to decide to buy gets my shares. Same for buying. I decide what I'll pay, then make that offer to those with shares lined up to sell. First one to provide me their shares get the money. The complaint is that the fastest HFT trader sees my offer, decides whether they can pass it on to somebody else who is not so quick, grabs my offer and immediately passes it on to the slower-witted computer traders. The fast HFT trader makes a little profit. But if my offer is not immediately tempting the HFT computers won't grab it. Some other computer can see the offer, know that they have a buy order at that price and reach very slowly out and GLOM, got it. The super-fast traders can't see the slow order arriving until it announces its arrival by taking the offer. But the supersonic million mile a minute computers can then be first to get to the next offers or make offers before other half million mile a minute subsonic HFT exponents can swarm in. More fun is the Flash Crash, when dueling computers test each others' responses and depth of markets and stop-loss orders, margin lending and general panic responses. If they find a soft spot, they'll whack it and whack it to see what happens. Other computer million mile a minute HFTers will have to join the flash or risk being left high and dry if it's for real. They play chicken with each other as they watch what happens in the markets as brokers dump margin call responses without bothering with the margin call, or sell on stop-loss theories. Down down down it goes in seconds. When the world champion computers see that the dullards have had enough, they go big at the bottom which causes the panic rise again as none of the computer systems want to be left behind and so they all buy like mad on the way back up before the sellers realize the fall is over and the rise is on. Great fun. The way for we slow-witted humans to play it is to leave buy orders on the table so that when a crash comes, we are lined up to grab our quota of forced and panicked sales. There is a hazard though. One is that sometimes crashes are due to actual bad news [not a good reason to buy at 10% below the current price] and that the authorities will cancel trades as they did in the big flash crash. It would NOT be good to have a buy trade at the bottom canceled, especially if one sold the stock later only to have it rise higher still [which trade would NOT be canceled by the authorities]. Mqurice