I'm unpredictable like that. And I thought there was a nice analogy in there about electronics having faster reaction times and more stamina when it comes to getting a job done more efficiently than humans
This didn't happen all at once... FX markets started moving in a big way prior to equities/S&P futures massive sell-off. After that began, the market execution sweep order (supposedly from BarCap) hit the S&P futures (starting at around 1100 level, perhaps a bit below). As the S&P sold off, so (logically) did the Dow and other index futures because of the interconnected nature of the global system. The rapid drop to down 1000 (granted, from down a few hundred points to start), which I am specifically speaking about in my prior post, can largely be attributed to the S&P sweep. In terms of stocks, despite all the media hype about a fat finger execution in stocks like Accenture and Proctor and Gamble causing the sell off, those stocks did NOT sell off dramatically until AFTER the bottom on the S&Ps (and we're talking a few minutes here, not seconds). EDIT: To confirm, I agree that stops/sell levels were triggered in a big way, thereby increasing the sell-off across global markets. However, this was (again) not HFT's fault... for a stop order is not only utilized by HFT strategies but also automated strategies. In fact, most HFT strategies (again, logically) trade so fast that they will avoid market sell orders because the chances of an asset moving significantly over the time frame they are trading is very, very small. Unfortunately we'll never know for sure, but I bet there were more stop market orders triggered by computers (but not HFT related) vs. HFT strategies.
As far as I can remember investors were paying more (i.e. larger spreads) before? Wasn't the spread something like 1/16 back in 2000? Wasn't it Island ECN and more generally computerized markets that brought smaller spreads? from 1/16 to 1 cent, it looks to me like a factor 6... so who cares who is on the other side! When will all these dumb NYSE market makers understand that their job is better done by a computer and that their only existence is justified only to produce noise on CNBC?
well to be honest I still beg to disagree. This was not an somewhat orderly crash like in 87. This was a complete malfunction of the system. And I think the linkages between the exchange pricing feed and ECNs was completely messed. That some ECNs dry up in volatile times is understandable but that orders are routed to the ECNs during that time just because execution at the NYSE or NASDAQ was purposely slowed down does not make any sense. That only proves my earlier point that you dont set up a HFT and also execution algos with a few lines of code. The problem is the same than what we had with CDOs. Most quants had not the slightest ideas how those vehicles perform under stress, and how the risk can be managed. Now, most of the CS boys from Cornell and Co were told to play their magic hands without knowing the least about mass psychology, markets, and asset prices under different scenario stress tests. I am very certain that so far NOTHING has been done to avoid what has just happened a few weeks ago. The same could occur again.
First, may I suggest you change your broker? Second, working for an institution is frankly speaking NOT a reference. Third, may I suggest you go for retirement too?
another kid who believes he knows the markets. The street is littered, welcome to the club. No its not a reference but it gives me the insight of having traded many more million shares than most other self-proclaimed gurus. It forms the basis of me saying that spreads in effect are not tighter after HFT joined the fray. And what are your qualifications or at least points you try to make?
if they regulate and enforce the reg's before this market is destroyed,you will have to learn to trade,right now you're no more than a cashier working for the supermarket,by that time there will be so little left of you ,doesn;t seem there is much left now,that you will have passed up your chance to learn how to fish and keep yourself feed for life...good luck with that attitude