So many blatant abuses of the system. 1) 99.9% of all bids/offers are cancelled without being filled. 2) If there are 30,000 shares bidding spread out over multiple ECN's and I try to hit the bid for 10,000, all the ECN's pull before my order can route among them and my order gets filled at lower prices then the bid flashes right back up to the original quote. Complete theft. 3) orders should not have tag I.D.'s that the exchanges sell to the HFT shops. It's no different than playing poker with your hand showing. 4) Large HFT shops should not be given preferential order type treatment so they can jump the que and guarantee risk free trading. 5) news services allow large HFT firms to pay for an early release of market moving news (split seconds, but might as well be hours for their technology). So many other criminal actions, but the SEC is either too stupid to figure it our or they are complicit in the thievery.
One way to fix the system is central exchange where all orders would have to be actually sent to match using the same queue and similarly cancellations would have to be queued as well. That would eliminate the advantage of order internalization and certain forms of front running. It would not eliminate latency advantage but that would be less of a problem since matching would be more transparent and order book would be more real. Currently the better connected ones on any local venue can jump in and out risk free in front of others because they have total control and outsiders are at disadvantage. Once order would have to go out to central order exchange they would loose this edge.
I was hoping 777 would answer (but he most probably won't). Arguable but I agree - that's a statement, not a solution. There are many crooks in every business. Blatant abuses everywhere from police to politics to the stock markets. I know that to be factually incorrect but I agree, a large portion of quotes are cancelled and much of the quote volume is spam (presented with little intention of being filled). Not really but I see your point. Not complete theft but if your order was placed prior to the quote being cancelled then you got screwed. It also depends on the type of order you sent to your broker - and then the type of order your broker sends to the exchange. Send the wrong type of order and it's on you, not on them. Try looking at guys like www.tradechecker.net. They are redoing their site so maybe give it a few until their new site is up but you can check your trades with them. Not sure if you can check orders placed or just trades executed. It's a free site, and they found a few bad fills from my E*Trade account. (again, free site - no affiliation) Well that's an opinion not a statement of fact. I think you have a problem with the retail brokerage shops selling/flashing the header information to the HFT shops; not the actual ID tags. I would also say that if you use directed orders (sent to an exchange, not an internalization or "auto route" option) you wouldn't have that issue. It's also not the exchanges selling the header information, it's your broker flashing the order because you sent it auto-route (AND AGREED TO IT IN YOUR AGREEMENT/CONTRACT). Again, if you direct an order to the NASDAQ or NYSE then it gets filled on the exchange you send it to (or not filled); no where else. That's an opinion again, and you would have to qualify that a little more. You can't watch a YouTube video and assume that all HFT shops have a *special* order type. There are very legitimate reasons to have all order types - there are also very blatant abuses of firms qualifying to use these order types (which is a problem). Also, there is no "risk free trading". Exposure is exposure. Even in cash you have risk to the USD. I don't know very much about this so I'm not going to comment. Are you saying that there are faster delivery methods for higher-paying customers or that the firms publish and deliver the data earlier to higher-paying customers and intentionally slower to lower-paying clients?? Again, if you state a specific factual crimes or theft or state factually that the regulators are complicit I'm sure something will be done promptly. Nice idea but it'll never happen. Too much money in the retail brokers and internalization shops. If that were to happen you'd just see colo space skyrocket out of control to put latency into the mix as the new edge.
Wins..back in a day I've proposed number of solutions... it.s all can be done in one day with one executive order from SEC. The problem is..While attorney general is quoting stock777, SEC won't listen. And i think we all know why.. and for same reason kicking the can will continue
It is already implemented or about to be. We should just follow the leader, the Europeans, and see how their solution works out. If it works well, then adopt it, i.e., copy it! http://www.futuresindustry.org/futures-industry.asp?iss=216&a=1601 If everyone ate more sauerkraut a lot of problems would go away.
Eric T. Schneiderman election is up this year. Either HFTs shut him up or vote him out. HFT will blow u away. far far away! Small Traders! u will always lose! Now, reload your accounts! Reload
PHLX options exchange had a rule around 12 years ago that once you put in an order, you couldn't cancel or change it for 2 minutes. It was pretty unpopular, because the underlying stock can change a lot in 2 minutes. But what if there were a rule that any order, once it reached an exchange, could not be cancelled for, say, 1/50th of a second?