Personally... I don't see how this "fractional penny front-running" has any material impact on the rest of us. If you're "playing for a fractional percent of a penny", you're likely "fishin' in a dry hole" anyway. If such front-running (immaterial to most of us) is illegal, should be stopped. If not, shouldn't be an issue for the rest of us where a "$0.01 execution price makes a difference." Tempest in a tea pot. Much ado about nothing.
Because the SEC is "worthless as tits on a nun". The only time the "get" anything is after the "horse done left the barn".
Scat..the most important of all priorities in execution is a price. then size then time of your order. if you place an order to buy at 100 or whatever price-you might see 99% of the time(specially ,if you right about certain price level and price is about to go up) that your 100 shares lot immediately became at least 200. mean-someone else is betting at same price. what you did not see (cause we aren't even allowed) is that his order is not 100,but 100.00001, thus-better than yours and if someone is selling-he will get the shares,not you. cause his price is better than yours. why certain group of 'chosen ones' are allowed to do that and we don't-beyond me. this is where SEC can step in and can simply issue ONE executive order to finish this nonsense overnight. they chooses not to. for many many years. why no one is raising questions about this f**** so obvious discrepancy between market participants? it would be a nice step toward better markets. they(WS) are unhappy because the volume is low? well..they are the ones,who f** it up. along with SEC. just like everywhere else in US-this field is NOT 'people friendly'.
Of course, you're correct. However, unless you're playing in that arena, seems irrelevant. As non-HFT traders, we have to be eying a bigger horizon. A "penny or two" slippage shouldn't make a difference for the swing trade we should be trying to capture. And if someone front-runs our trade for a fraction of a penny, it shouldn't make a difference as to whether we're profitable or not... not that what the HFTs do is right or moral... just that they should be immaterial to our objectives... especially as we can't do anything about them... other than to get the revenooers to stop their activities.
it won't,if you place very few trades on super liquid stocks,but it will ,even if you trade fairly often. in many case you will find yourself chasing the price. that's on individual level,but if you watched 60 min-they are saying same exact thing about institutions(who buy and sell large quantities daily)such as pension\retirement plans,mutual funds etc... will it affect them? YES,but problem is-they don't care. cause it's not their money. it's average joe the plumber's money,who is clueless about this whole thing. those funds performance will suffer,but nobody cares. if fund get raped in slippage-they can always raise their fees. it's funny,how ignorant the public and the industry is. my wife have some money in TIAA CREF-probably one of the biggest pension players out there. few times i raised the question about their fees on basic fund,that tracks SP500 https://www.tiaa-cref.org/public/tcfpi/Investment/Profile?investment=CIDX no one was able to answer to me,where the dividends go and why fee is way higher(it's lower now,after extensive audit) than similar products at other firms. those are very simple things,but no one care..i mean-clients.
I don't know why, but it amazes me that most of you are shocked at all of the corruption.... The market or any field (such as health care) have always been rigged. Where ever there is big money to be made the brightest and smartest will find a way to rig it. And everyone is in on it except for the public. True suckers believe that the working man has a fair shake!
It's not irrelevant because the parasitic HFT siphoning trickles down thru all markets... stocks and futures alike. Order-flooding and bid-lifting prevents guys from filling 100 shares, 1000 shares, 5000 shares at their targeted prices. Some of those orders never fill because price moves away & outside the targeted fill zone. What would have been true liquidity in the market if those stock orders were all filled, is instead a liquidity net-drain due to HFTs spoofing and moving price artificially from the true bid/ask market participants while working to front-run order flow. Day after week after month after year of that shit, guys either toss the towel or scale down size by force. Today's news talked about ICE and NYSE downsizing due to dwindled trading volumes. Oh really? And why is volume down at all? See the HFT chop-churn examples above. Now over in the futures markets, it's a trickle-down mess. Russell 2000 emini futures are flying all over the charts on 1, 2, 4 lots trades. Try filling a measly 10-lot and see if you don't have your ass handed to you with only 2-3 contracts filled on the runners, all 10 filled in the chop and the stops all slip to boot. Why? Because liquidity is nil with algos hammering the tape. Used to be nothing to click in 10 - 20 Russell contracts at a clip and not slip at all and fill them all. Now if you click in a 20-lot, you are the Russell market entirely for several strikes. Any individual trader who is not defending HFTs because they are part of the front-run gravy train simply don't understand what the parasitic effect is on overall markets. It's to the point where you can't get filled on size unless you accept brutal slippage in, out or both in any but the most liquid markets (i.e ES). Guess who is siphoning that slippage while dictating whether you fill size or not? If all HFT trading were shut down tomorrow, all markets would return to much more normal and liquid behavior in one helluva hurry.
So what you are saying is the market fills are like they were in the 90's before ECN's. You had to buy when stocks were falling and sell into rallies to get good fills! In reality nothing has changed except a market maker or specialist do not hold your order for 2 minutes while you can't cancel or change your mind.
http://blogs.wsj.com/moneybeat/2014...-have-no-idea-how-bad-it-can-be/?mod=yahoo_hs By STEVEN RUSSOLILLO 3:21 pm Mar 31, 2014 Billionaire investor and Dallas Mavericks owner Mark Cuban said the risk associated with high-frequency trading has an âunquantifiable costâ to the markets. âWe have no idea how bad it can be if something goes wrong,â Mr. Cuban, a longtime critic of high-speed trading, said Monday in an interview on CNBC. âThatâs an unquantifiable risk and thatâs a problem.â His comments came after best-selling author Michael Lewis made a splash over the weekend by saying the U.S. stock market is rigged. He says high-speed traders are able to front-run ordinary investors and make billions of dollars. Mr. Lewis, author of a new book called âFlash Boys,â made his comments Sunday evening on CBSâs â60 Minutes.â