manipulated penny stocks are the easiest stocks to trade. instead of earning tons of money, many people lost tons of money because - they entered far too late - they failed to close position when price collapsed That's where they blame manipulators instead of thanking manipulators.
Listening to the stories of pit traders makes me sad we no longer have this option. I don't really care so much about entry spread on contracts because futures to me is limited to spreads these days and I hold them for 1-3 months at a time. Of course entries are important, but 1/8 tick on an intra that returns 30-50% ROM is basically nothing. At least not at my account size.
Right, my point is that traders usually benefit from artificially manufactured moves. I'm still not clear who is being harmed by spoofing. I understand and accept @GRULSTMRNN point about fair markets, but who is being harmed? Someone mentioned instability. Ok, why large orders cause instability? Oh wait, because people who are supposed to make the markets stable (and enjoy privileges for doing so) withdraw liquidity at the first sign of danger! Happy to be corrected.
Ah, I haven't been in the pits but HFTs just automated everything that they did in the pits. Most of the strategies came directly from them. Did I forget to mention that pit traders were co-located and had access to info before anyone else? Exactly, they have been made more efficient by algos. We don't want efficient markets, we want deviations not based on fundamentals. At least for short term trading. For longer term, HFTs simply add liquidity and tighten spreads. Just opinion.
Ah I think this makes a lot of sense. Someone important has been hurt, it's not simply an application of the law.
who are affected? those who do very heavy scalping, those who use DOM and focus on bids and offers, those who do HFT (because they are competitors !), and perhaps market makers.
Regulators don't care about you and me, they protect interests of exchanges and their members - the pros.
As an aside, that Groot bit I saw in the thread earlier, where I saw his nick but no text, was a true glitch. It is not there anymore. So he still has me on total block. Worst feature ever, mostly.
My point was mainly that if it's trading fundamentally different than what it represents either the price gives, the market gives, or it ceases to be anything more than a gambling instrument. I don't really care much about scalpers. Deviations not based on fundamentals are inefficient. HFTs are not creating inefficiency. They are creating chaos. Are you suggesting here that, because there's a possibility to MAYBE be on the right side of a flash crash, we should allow these cowboys to fake liquidity in order to coerce the market into a making a mistake? That's not inefficiency my friend, that's criminal. A farmers market with two competing farmers will find efficiency eventually through discovery. If I ran in there telling people I'm selling oranges 4000 times cheaper with 10000 times the inventory, and then after everyone starts selling to compete I say "whoops sorry!" the only orange I'll be eating will be in a sock.