HFT Killing Retail Traders in ES Futures - NY Times Today

Discussion in 'Index Futures' started by ashantt, Dec 4, 2012.

  1. ashantt


    The researchers found that more aggressive high frequency traders accounted for the largest share of trading volume and made the biggest profits. The most aggressive scored an average profit of $1.92 for every futures contract they traded with big institutional investors, and made an average $3.49 with a smaller, retail investor. Passive traders, on the other hand, saw a small loss on each contract traded with institutional investors, but they made a bigger profit against retail investors, of $5.05 a contract.

    Large investors can trade thousands of contracts at once to bet on future shifts in the S.& P. 500 index. The average aggressive high-speed trader made a daily profit of $45,267 in a month in 2010 analyzed by the study.

  2. Tsing Tao

    Tsing Tao

    So here's my question. If the average aggressive high-speed trader made a daily profit of $45,267 in a month in 2010, then who is this money coming from? They can't all win forever.
  3. Small percentage of large winners... taken from a large percentage of small losers.
  4. The money is ultimately coming from retail/fed .. Hedging out in index futures on cash equivalents. Even though the hedge is loosing money in futures, it's gaining on cash. Thus money is siphoned from MM's who underperform the indexes or even have negative returns.
  5. Tsing Tao

    Tsing Tao

    If the money is coming from retail, then it's not sustainable. There's a finite amount of money that can come from retail, and from what I've been reading, that's less and less.
  6. So they have taken the place of the floor 10-20 years ago. It was a disruptive move but still the same game.
  7. emg


    More than 90% of small traders lose! They just lose

    "The Chickens are coming home to roost."

    HFT will blow u away
  8. Bob111


    tell me something i don't know..i've been saying this for years,but ET is in denial about HFT. keep saying-it's all good and doesn't bothers me... i was first in line (as stocks daytrader),now futures trades start feeling the pain.
    yes,HFT's money come from me(for those,who didn't understand). my profits are decreased no less,but by few times. it's nearly impossible to sell something at ask and buy at bid,unless the price is about to move in opposite direction. at this point-i don't really give a f** about it.cause game will be over soon,after gvt's transaction tax.
    so-STFU and trade,while you can
  9. emg


    Best quote from the OP's article:

  10. emg


    Here is the problem small traders,

    HFT (robot) does not have emotion to trade. In other word, HFT has huge capital with no emotion to trade and they are whooooop your ass out of the game.

    small traders, u are getting the wrong information from 3rd party vendors that emotion is the caused u are losing. the reason u are losing is

    lack higher education (advanced math, computer science) and capital.

    all that said

    Keep reloading your accounts. Reload!
    #10     Dec 4, 2012