High Frequency Trading: Can Any Stock Replace Citigroup?

Discussion in 'Trading' started by Marc to Market, Mar 21, 2011.

  1. Absolutely not. Things can mimic it on 1/10th the scale perhaps, but there won't be another stock with an average inside quote of over 3 million shares on each side of the market.
  2. EPrado


    The HFT/Rebate guys will move into another stock. Maybe ALU,S,SIRI.....something of that sort. That volume will go somewhere. Right now these stocks don't have the volume or liquidity, but right around the time of C splitting you will see the volume in one of the above stocks skyrocket.

    These guys are not gonna just disappear. I'm sure the ecns will also come up with new pricing or something to lure these guys into a new arena. The ecns cant afford to lose these guys. C accounts for at least 10% of the market volume each day.
  3. Yep and worse even, everybody will stampede into stocks like S, ALU, and Q leading to crappy fills since so many traders will be bidding and offering the stock but the volume just won't be there.

  4. EPrado


    Just curious...if the bid/offer size explodes how will the volume not be there? If anything the fills in these stocks will be much better.
  5. While you can artificially create liquidity, you can't really artificially create volume. So take a stock like S which averages ~50M shares a day. So now instead of having an inside bid/offer of around 500K shares on each side, you have 2M. With the increase in liquidity comes an increase in competition to get fills. Much more liquidity with only maybe slightly more volume means the liquidity provider/rebater/scalper/HFT'er/prop shop/etc. has a harder time making money.

  6. EPrado


    You could be right. But right now, it seems to me that all of the volume in C is HFT/Rebate guys going back and forth. There is no institutional money trading it....probably not a lot of prop guys messing with it due to lack of volatility. So it's possible that these HFT guys will all go over to a S and start trading it. Might not be that different than what's goin on in C now. These HFT's have to go somewhere. Also watch these ecns start offering much better pricing to provide and even take liquidity in certain stocks to capture the lost C volume. C trades way too much for the ecns to lose that volume.
  7. I'm pretty sure I am right. A lot of black boxes and HFTs are already trading those other symbols right now as it is. There simply isn't enough volume for them to trade more shares, otherwise they would already be doing it now.

    A lot of the flow in C is indeed institutional, retail, hedge funds, etc. It's just the other side of that flow is the day traders, HFTs, black boxes, etc. It's one of the biggest banks in the world dude, not to mention one of the most widely held stocks. Sprint or Alcatel-Lucent can't hold a candle to it. Just look at C's float compared to these other symbols and you'll see C's is 10-15x larger.

  8. EPrado


    You do make good points...float is obviously huge. Right now S or ALU aren't even close to it. But once C splits it is possible that all these guys go elsewhere. They aren't gonna just stop trading. If you get enough traders involved they can turn another low priced stock into a C type trade. I don't think you can really compare the likes of ALU and S right now to what they might become when C splits. These guys have moved before...AIG...FNM...FRE...I guess we'll see in the beginning of May.

    What these guys should do is just load up on puts on C....stock is gonna get clobbered when it splits. You can't turn a crap bank into a good bank by changing the price.
  9. why would it get clobbered. you mean some asswipe thinks its easier to fall from 45 than 4.50? oh, that must be it.

    I forgot, this is et.
    #10     Mar 21, 2011