I've seen at least widespread subpennying on the options. When I put in an order in the middle of the spread it is instantly insulated by many orders. Wait a second, do it again... same thing. The only way I get in is by accepting temporary loss and I get out when it goes even higher after. In that regard they blatantly cheat like a mofo. Come to think of it if my broker has hft why is that happening? It isn't widespread as hft costs more than 30k a month... as I said. There are not any billionaires making the marke in slowmode. Some dude in his undies putting in a limit to buy for 5000 worth of stock isn't going to prevent them from price fixing. They make the market and perform breakup large orders for people.
Funny, every time someone says something bad about brokers, option sellers or market makers he is immediately laughed at, usually by the same ET members, who categorically deny everything he is saying, like if their life ($$$) depended on it...
If someone steps ahead of your order in increments that you dont have access to yourself, obviously thats a problem. Its one of the things I would be against. Also SMART routing imo is dubious. I've put in orders via SMART (me being best ask/bid) and have orders execute past my price on the tape (observed on 3rd party software). Very shady. But that's a different case alltogether than collusion.
The collusion part is a different issue. The macro situation with facebook is pretty suspect all on it's own, with the price dropping to before earnings level... earnings where they doubled estimates. Not surprisingly, the price it almost shot to was between two enormous option open interests, and above that price was many, many outstanding calls. While watching it for a while, I saw a few of the "dead giveaways" as I like to call them. The price shoots up 5 or 10 cents on an enormous amount of volume (~1 million) and then my program goes to the next minute before the price drops the same distance on... 80k volume. If you are just looking at the order book that might sound reasonable (that's 800 lots against limits of 1 - 10 on the book) but that would mean you know nothing about hft. Looking at a level 2 order book is useless today. It also happened several times this morning (if you are looking at 1min intervals) that the price shot up a whole dollar and instantly flashed back down. Derivatives are where the money is at these days, and Wall Street has figured out how to steal all that money by colluding... once again.
That's why Level 3 trading platform is restricted to registered market makers... Steal a bottle of Gin at the liquor store and they will arrest you, but steal millions electronically from unsuspecting market participants - on a daily basis - and nothing will happen to you.
Speaking of HFT, there is a new book called "Trading the measured move : a path to trading success in a world of algos and high-frequency trading", by David M. Halsey. A short summary : "Trading the Measured Move offers a blueprint for profiting from the price waves created by computer-driven algorithmic and high-frequency trading strategies..." I just ordered that book from Amazon, will tell you more about it when I read it.
OP If trading FB is kicking your ass - move on to something else Most of each session.., its PA is straight forward Disclaimer; I know jack about options RN
Cool. Pls do keep us updated on your review of the book. It gets old hearing all the same complaints of markets not working etc. Be great to hear solutions. We adapt or die. No excuses.