the natives are restless. HFT SCUM on the run?

This is the silliest claim that I've seen. According to you, if a HF trader observes the price action and order flow, buys 20,000 shares of IBM at 180.15 and then two minutes later sells them for 180.18, for a profit of $600, that's stealing from investors. But if a day trader observes the price action and order flow, buys 1,000 shares of IBM at 180.15 and then 6 hours later sells them for 180.55, for a profit of $400, he's only making money from other day traders, and somehow those poor investors are not involved.

Apparently the market magically directs all orders by day traders to other day traders, while the orders from the wicked HFTs are sent to innocent investors. The fact that day traders on average have less of an edge than do the HFTs, and so are more likely to lose, is beside the point.

 

theres some truth to the comparison, but the diff is, hft has taken an unfair advantage in COLLUSION with the exchanges.

everyone is trying to frontrun somebody.

 

how is that working

 

yeah!!

 

how was it today? nice,tight and orderly stock market huh? HFT is nothing, but the scam,based on certain technical advantage over rest of the market participants. US stock market is FUBAR

 

on some low volume stocks today,during the big moves, the spreads are as high as 10% between bid and ask. in the middle of the fucking trading session! not some pre\after market..so much for fair and more importantly orderly markets..wow..good job SEC !regulating the stock market...

ESSX-17% spread right now..70K average volume,looks like a decent stock to trade..unbelievable...

 

This article is always my favorite when I think of this subject...

Article from Zerohedge written by Dennis Dick of Bright Trading, LLC:

My firm, Bright Trading LLC, recently provided comments to the SEC concerning a predatory trading practice that is compromising the NBBO. It is the practice of using undisplayed trading centers to step in front of displayed orders by an infinitesimally small amount. Today I was trading a very thin, illiquid stock where these predatory trading practices run rampant. I decided to document the sequence of events.

Time & Sales

Time Last Share (100 lots) Exchange

10:19:35 14.04 1 FINRA TRF

10:19:48 14.04 1 FINRA TRF

10:20:00 14.0399 1 FINRA TRF

10:20:14 14.0399 1 FINRA TRF

10:20:28 14.0399 1 FINRA TRF

10:20:43 14.0299 1 FINRA TRF

10:20:58 14.05 1 FINRA TRF

10:21:15 14.0399 1 FINRA TRF

10:21:31 14.0399 1 FINRA TRF

10:21:49 14.0299 1 FINRA TRF

10:22:06 14.0199 1 FINRA TRF

10:22:22 14.05 1 FINRA TRF

10:22:41 14.05 1 FINRA TRF

10:23:00 14.0499 1 FINRA TRF

10:23:18 14.05 1 FINRA TRF

10:23:37 14.05 1 FINRA TRF

10:23:57 14.05 1 FINRA TRF

10:24:15 14.05 1 FINRA TRF

10:24:36 14.05 1 FINRA TRF

10:24:56 14.0299 1 FINRA TRF

10:25:16 14.0299 1 FINRA TRF

10:25:34 14.03 1 NYSE

10:25:34 14.04 1 NYSE

10:25:37 14.0399 1 FINRA TRF

10:25:58 14.0299 1 FINRA TRF

10:26:20 14.0299 1 FINRA TRF

10:26:40 14.0199 1 FINRA TRF

10:27:02 14.0199 1 FINRA TRF

10:27:24 14.0299 1 FINRA TRF

10:27:44 14.0299 1 FINRA TRF

10:29:58 13.99 10 FINRA TRF

Sequence of Events

Time Event
10:19:34 I place an order to sell my 300 shares of RBS.PRE at $14.05

10:19:35 An algorithmic trader steps in front of my order at 14.04 (offering on NYSE exchange).

10:19:35 The stock trades at 14.04. The displayed 14.04 offer is not filled as the quote remains the same, despite the stock trading at that price. The trade was reported on FINRA TRF (FINRA Trade Reporting Facility). This means it was traded off the exchange.

10:19:48 Stock trades again at 14.04, reported on FINRA TRF, displayed offer is again not filled.

10:20:00 Stock trades at 14.0399, in front of displayed offer of 14.04.

10:20:14 Stock trades again at 14.0399, in front of displayed offer of 14.04.

10:20:18 Stock trades for a third time at 14.0399. Displayed seller is again not filled.

10:20:38 Frustrated, I move my ask price from 14.05 to 14.03. I am now the best offer.

10:20:43 Stock trades at 14.0299 in front of my 14.03 offer.

10:20:50 Frustrated, I cancel my order. The best displayed offer is now 14.05.

10:20:58 Stock trades at 14.05, but the displayed offer is again not filled. Trade is reported on FINRA TRF (off exchange). The displayed offer moves down to 14.04.

10:21:15 Stock trades at 14.0399 in front of displayed 14.04 offer.

10:21:31 Stock trades again at 14.0399 in front of displayed 14.04 offer.

10:21:41 I decide to try and offer my 300 shares again at 14.03.

10:21:49 Stock trades at 14.0299 in front of my displayed 14.03 offer.

10:21:55 Frustrated I move my offer down to 14.02.

10:22:06 Trade goes off in front of me again at 14.0199.

10:22:15 I move my offer back to 14.06. Another trader offers in front of me at 14.05.

10:22:22 - 14.05 trades 7 times, and 14.0499 trades once, but displayed offer is not
10:24:36 filled on any of these orders.

10:24:44 I move my offer down to 14.04. Other trader immediately steps in front of me and offers stock at 14.03.

10:24:56 and
10:25:16 14.0299 prints twice, displayed offer not filled again.

10:25:34 Displayed offer 14.03 gets filled, and I get filled on 100 shares at 14.04. Hallelujah!!

10:25:37 14.0399 trades in front of my remaining 200 shares offered at 14.04. Another trader places sell order at 14.03.

10:25:58 14.0299 trades in front of displayed 14.03 offer.

10:26:20 14.0299 trades in front of displayed 14.03 offer again.

10:26:39 I move my offer from 14.04 to 14.02.

10:26:40 14.0199 trades in front of my displayed 14.02 offer.

10:27:02 14.0199 trades in front of my displayed 14.02 offer again.

10:27:10 I move my offer back to 14.03.

10:27:24 14.0299 trades in front of my displayed 14.03 offer.

10:27:44 14.0299 trades in front of my displayed 14.03 offer again.

10:27:50 I give up and move onto another trade. Later I am filled at 14.03, and the stock proceeds to go higher (only reason I am filled).

Who is this market participant stepping in front of my displayed offer? Who is this market participant intercepting the buy orders that are trying to take my displayed offer? Who is this market participant forcing me to pay the spread and hit the bid below? According to the implied exemption given under SEC rule 612, the only market participants capable of trading in sub-pennies are broker-dealers, to offer price improvement. Is this $0.0001 price improvement justification for compromising the displayed quote? This isn’t an isolated event, these events happen continuously every day in this two-tiered market structure. This is a crime of epic proportions, and our regulators need to deal with this immediately.

 

+1 Tsing Tao. i see and experience this shit every single day, 100 times a day. that why i stick with my statement above-US stock market is FUBAR. SEC is FUBAR too..the folks, who keep saying that HFT and current market structure is fine and there is no problem ether never trade the stock or buy and hold forever type of "traders"..
just like George Carlin use to said-it's a big club and you ain't in it...we are not welcomed here and i believe SEC and Wall Street purposely doing this. cause they don't want us here. for last 10 years there is no single rule or regulation was done that would make access into stock market for general public easier. cause wall street don't want that. what they do is they rape each other at the expense of the tax payer. money managers,who handle your pension plans, have to buy and sell continuously..do they care about HFT? fuck no..cause it's not their money. mutual funds managers? fuck no..raise a fee a bit due "market conditions" and it's all fine again..they not manage their own money either..it's a fucking circle and they don't' want us there..PDT and 25K min was a great start to kicking general public out of the markets..transaction tax will be the last nail

 

is it so hard to give us,the retail folks, ability to see sub penny orders? why all retail platforms only display 2 numbers after decimal point?
is it so hard to prohibit sub penny trading once and forever? they can do it overnight,but for whatever reason choose not to. and for us-here is another slap in the face with a fucking margin raise at IB and some other firms(to make us suffer a bit more)..way to go..make me think that emg might be right after all...you have to think a lot,before you choose this path,cause all entire world will be against you. forget the fucking odds,probabilities and all that shit..there is will be a lot more "technical" problems in today's trading..