Registered: Mar 2008
10-02-12 12:14 AM
just a follow up to that article i linked to by dick. the primary basis of his argument he justifies with his references to a nanex article here: http://www.nanex.net/aqck2/3517.html
if anyone actually reads that article though, you can see it's making a set of assumptions that are just plain wrong. the primary one being, all lit quotes are RETAIL INVESTORS, and that any sub-penny prints that occur in between the spread should be interpreted as a direct cost to those same lit posting RETAIL INVESTORS to the tune of $1B/yr.
hft claims aside, anyone who trades for a living should know how ridiculous that argument is.
imo, quoting and referencing nanex "studies" does not constitute "doing your homework".
nothing put forth by nanex to date has been peer reviewed, nor is it taken seriously by the industry. the only people who i've seen quote or reference them are ones looking for something sensational to print (ET posters, zerohedge/conspiracy blogs, ignorant commentators or those with an agenda, and sometimes even the ap).
when they begin to show up in the journal of finance, or in roundtables with actual industry analysts like the tabb group, then one can assume they've decided to give their analysis more thought. as of now, however, the only thing they communicate well, is the fact that they're a washed up data/technology firm who could not keep up with the large increases in quote data/latency demands and now feel the only competitve edge they have is to demonize the industry they once served.