I had enough. They have an hedge. It wont last, other's will find out and opportunities will vanish. There is nothing unfair, no mystery, no conspiracy theory. Mark my words: in 5-10 years there will be a book by Wiley about high frequency. You will be able to rent space on servers specialised for high frequency. Think that Merill had "the" black box in the 80's with their simple pairs trading soft. Others found out and who is making easy money in pairs today? No one. Some opportunities are there but the easy system is efficient. Same thing. And day traders also will catch up and see the little gimicks and adapt. And yb the way, I have no clue what I am saying... as eveyone else, even the reporter. MOFO, if Intel goes to the roof, Of course peers will go up. It's called pairs trading and nothing fancy about that, nothing new eitheir. They may have some new formulas and techniques to optimize the gig but it's the same old shit. We so overlook that saying from Jesse Livermore that Wall Street will never change. And yes, the CFTC or whatever will look at their ass, because they look where the public want them to look. Lazy politics watching for their own butt.
From the article: "The result is that the slower-moving investors paid $1.4 million for about 56,000 shares, or $7,800 more than if they had been able to move as quickly as the high-frequency traders" So buy and holders paid 14 cents a share more.. before all the electronics the commish would have been $200 per order. If all those 56,000 shares were done in 100 lots they would have paid $2 a share more, 1000 lots and it would have been 20 cents more... this is not about costs going up, it's about somebody making some money and a lot of people feeding on a frenzy of class jealousy or whatever... I don't do high freq trading but I don't like the idea that a bot can see the orders before anybody else, that has to go...
Looks like the future has already arrived: http://www.amazon.com/High-Frequenc...3761/ref=sr_1_1?ie=UTF8&qid=1248840826&sr=8-1
One excuse for flashing orders and HFT is that it is good for liquidity. So the only limiting factor to stock liquidity is the speed of light I guess. "Real time quotes" are going to become like 15 minute delayed quotes at some point if everybody peeks at orders. Of course the more people looking at orders, the less of an advantage to be gained- so WTF. A slippery slope.