Around 60-70% of trading is HFT and a huge percentage of "fake" orders polluting the marketplace - almost exclusively HFT.
If you're talking about the currency market then that HFT percentage is probably even higher. As for option markets the volume is so low I don't see how HFT could work there. My job as a stock trader is to look for opportunities and setups to get into a trade. Those "fake orders" whatever these are supposed to be are there for me to put into my analysis of the market. If you want to tax/destroy a market to get rid of these "pollutive fake orders" then you will have no orders at all anymore. It's like banning (or overtaxing) the trade with used cars because all used car dealers are supposed to be crooks. - no trade means no tax income Anyway, I'm eager to see what effect that tobin tax will have on european markets. People/politicians rarely learn from the past. Like today's marxists love to see beyond the collapse of the soviet union.
its not politicians stupidity. this tax is a planned action on a massive scale to take the money from pensioners and every avg citizen who has some money invested in stocks. as these people will ultimately pay the tax. the banking cartel would love to see everything taxed at the highest possible level. so money could flow from loan interest. the more taxed a citizen is, the more loans he has to take. now i expect a tax on parents who have too many kids.
They would look exactly the same way. Markets were a "random walk" long before HFT was invented. Taxing transactions won't stop markets from falling. EU politicians are stupid if they think that markets will become more "rational" by eliminating HFT or any other form of short term trading. Why would HFT or any form of short term trading destroy the market in any way...??? Are you under the impression that markets are supposed to go where the long-term investors and governments dictate...? It is a win/loss business, you can't be a winner only in investing or trading. To make a profit someone has to lose. HFTs or short term trades don't alter the market in any way. The market still remains in its "random walk" format. If anything HFT add liquidity and ensure that your orders will get hit. I consider them to be beneficial. Picture a long term investor trying to get out of a position when absolutely no one is buying... HFT traders might be willing to take the other side on a short term long trade... If they can't make money on it then they won't do it and the long term investor will lose all his money while crying that he can't get out...
The fact that you honestly think that HFT adds liquidity says it all. They have sucked TRUE liquidity dry. The markets have never been this dysfunctional or disorderly. Confidence in markets has to be at an all time low,before these HFT/Algo d**kheads turned up things by and large worked out. Proud of the flashcrash are you?That was a fucking joke situation,not clever at all,made the business and it's participants look like a bunch of pricks. The silver lining here is that it's been pushed too far.The many recent 500 up/down dow days WILL make governments react,they have no choice as the they have to be seen to be doing something when regular people are suffering in almost every aspect of life from fuel to pensions to food. Common sense tells me they're gonna be toast soon.Then the fun begins as these a$$holes can't trade for toffee unless the pc does it for them. BTW you stick your stupid advice up your arse from your 1st line.Been in this a long time made great money and provided a great life for all my family,you i bet have made fuck all.
Agree completely. The simple fact of the matter is that when the markets are under true stress, HFT liquidity is simply nowhere to be found - they are under no obligation to maintain orderly markets and provide legitimate bid / ask liquidity at reasonable spreads like a sanctioned Market Maker would. The fact of the matter is that when markets are under high levels of stress, HFT further distorts the market.
lmao. thumbs up. I don't play intraday with the HFT sharks much, but it will be fun to see when the cost of doing business goes up for these jackals and makes the strategies irrelevant. Too bad it will ruin the scalping game for the rest of retail daytraders. Only takes one person to piss in the punch to ruin it for everyone. On the flipside, maybe if this is enacted all the brainpower they use to build bots to trade markets can be used elsewhere to create real jobs and add real social value.
""On the flipside, maybe if this is enacted all the brainpower they use to build bots to trade markets can be used elsewhere to create real jobs and add real social value."""" Dam right, perhaps they will go to the military and design ways to kill 7000 people per second, a clear advance over the conventional five per second, or perhaps they will take to manufacturing and design bots that do the days work of ten humans per moment
when shit hits the fan the market makers are nowhere to be found as the flash crash aptly proved. it was true in 1987 and it was true again in the last crash.