does market liquidity exist with HFT, or is it just a mirage

Discussion in 'Trading' started by falcontrader, Sep 27, 2010.

  1. If humans are in the market and market liquidity comes and goes faster then humans can react , than market liquidity is a mirage. so i say today with HFT market liquidity does not exist. that is why FLASH CRASHES occur and will continue to occur .
  2. bone

    bone ET Sponsor

    If you hit a bid or lift an offer you will get them.

    Contingent orders get gamed.
  3. rosy2


    for someone to guarantee market liquidity they need something in return. no one is going to quote all day without a financial reason to.
  4. dont think people even know what liquidity means.

    no stock price is sacred under all circumstances. its only worth X dollars AFTER you have sold.

    you have no right to any particular price. market orders are for fools and the panicked.
  5. Total bullshit.

    NASDAQ allows bids/offers to be pulled before being executed AT THE SAME PRICE LEVEL.

    Example of a trade in DELL-

    NASDAQ bid shows 50,000 cumulative shares at the inside market broken down into 5 separate orders-


    I want out of my 50k lot so I hit the bid for all 50k. I will get executed on the first order for 100 and most likely the second order for 900, but all the other bids ARE ALLOWED TO BE PULLED WITHOUT BEING EXECUTED.

    How does this happen? Simple, NASDAQ executes the order internally and anyone with access (paying for their service) can see the prints first and their computers can pull without being executed.

    So what happens to the rest of my order? Well I'm still stuck with 49,000 shares and the bids are now .01 or .02 cents lower and I get filled there. Upon which the NBBO immediately lifts back up .01-.02 cents as if my trade never happened.

    HFT box makes a quick $500-$1000 plus the ECN rebate, while I sit there wondering how in the world the SEC lets this shit happen.

    Rinse and repeat thousands of times a day.

    HFT has destroyed Wall st. Why do you think volume is collapsing with every passing month? The public may not know the intricacies, but they are well aware that the game is rigged.
  6. If that's true and i have no reason to believe it is not, the HFT's doing this are INSIDER TRADING. If you find out who they are, make sure you put them in jail. I'm not sure but I think you can pay for the data to see exactly who is doing this if you have a fair legal claim to do so. If your a big trader, and it seems that way, then why not look into a legal case where you claim back for all monies you've been frontrun out of at the very least. I've never understood why big traders don't take legal action on matters like this if they are convinced of it.
    All orders have to be at risk of being filled otherwise they are illegal. Maybe this is how the SEC determined that Trilliums orders were not bona fida, because they were taking part in this sort of behaviour. This of course is an assumption. I've always wondered how the HFT's could manipulate the bid and never seem to get hit. Even the HFT crash only kept them away for a few moments. Extremely brave or are they plain CHEATS. Know which one I'd put my money on.

    :) :) :)
  7. Darshan


    Not true at all---

    I'm routinely having orders get pulled when I try to hit the bid or take the offer.

    Flash orders are the biggest scam I've ever seen in the market and should be banned.
  8. bone

    bone ET Sponsor

    No wonder I have so many stock traders PM'ing me looking at getting into futures.

    The extent of my knowledge base in this instance is pairs trading - I get filled for size at certain price levels and never really had issues with it. GS-Redi Plus, IB Pro, that type of thing.
  9. Brilliantly put
  10. HFT has refined the difference between traders and investors.
    #10     Sep 28, 2010