Home » Posts tagged 'nanex'
Tag Archives: nanex
Joe Saluzzi: The Markets Are Still Way Too Vulnerable To A Sudden Liquidity Disappearance
Joe Saluzzi: The Markets Are Still Way Too Vulnerable To A Sudden Liquidity Disappearance
Joe Saluzzi, co-founder of Themis Trading LLC, outspoken exchange expert, and author of the excellent exposé Broken Markets, returns to give us an update on the state of high frequence trading — otherwise known as HFT.
In the past, Saluzzi has been a vocal critic of the dominant and parasitic role HFT algorithims play in today’s financial markets, siphoning off profits at the expense of the “dumb money” (i.e. retail investors) while undermining the integrity and stability of exchanges. Front running, spoofing, flash crashes — HFTs are the culprits behind them.
Saluzzi actually has some positive developments to note: namely that the obscene profits the HFTs used to make (i.e., steal) are moderating as the arms race in the industry has escalated and the players are increasingly competing with each other. Also, the SEC appears to be moving much faster now towards putting some material constraints in place.
But the unfair advantages that HFTs enjoy, as well as their threat to market stability, are still very real. If we don’t continue to fight to bring them under control, we risk a vicious downdraft during the next big market crisis should the algos instantly exit in a panic:
If the HFT algos get spooked and stop trading, then you got a major problem.
In times like this when there’s no storm out there, it’s time to fix the house now to make sure that when the storm comes the house doesn’t get knocked down. So how do you fix the house? By getting rid of the conflicts of interest, maybe adding more obligations for market makers, looking at those off-exchange venues which are considered ‘dark pools’ and learning what’s going on there, looking at all different types of the issues that continue to haunt us — most of which don’t become visible until they don’t pop up at the end.
…click on the above link to read the rest of the article…
Eric Hunsader: The Financial System is ‘Absolutely, Positively Rigged’
Eric Hunsader: The Financial System is ‘Absolutely, Positively Rigged’
Eric Hunsader, founder of Nanex, has been at the vanguard of warning about the dangers and the rampant fraud that the rise of high-frequency trading (HFT) algorithims have let loose in today’s financial markets.
While he usually feels like a lone voice in a world happy to deceive itself, he was shocked to receive a $750,000 whistleblower award from the SEC for his efforts. He’s been sadly less shocked to see that since the award was publicly announced, the abuses he reported have only become more extreme and frequent.
Of the situation that led to his award, he says:
The folks at the NYSE were selling their direct feed for north of $30,000 a month versus the SIP which is under a thousand dollars a month. Their customers are not buying it because it has that much more rich data. The thing that makes it worth $29,000 more is that it is faster, but that is illegal. Up until this point they deny that that is the case. And somehow it works. So the exchanges make all their money from their highest paying customers which are the high frequency traders. And the high frequency traders pay the exchanges exorbitant amounts of money to have a slight advantage.
That’s how the whole system works. It is absolutely, positively rigged. There is no question about it. It is rigged on many different levels in many different ways — for example, no retail order ever gets to see the light of day of the stock exchange. That’s one of the many eye openers. People who aren’t pros in the market don’t realize that it’s all a rigged game.
…click on the above link to read the rest of the article…
The Machines Are Going Mad – HFT Quote-Stuffing Desperation Spikes To Record High
The Machines Are Going Mad – HFT Quote-Stuffing Desperation Spikes To Record High
Source: @NanexLLC
Lord of the Flies: Dystopia is Arising
Lord of the Flies: Dystopia is Arising
Paper money eventually returns to its intrinsic value – zero – Voltaire
I was driving around Denver yesterday doing my “boots on the ground” due diligence scouting of the local housing market. I continue to see some “sold” and “under contract” signs but I’m seeing a pile-up forming in new “for sale,” “price reduced,” and “for rent” signs. The traffic update on the sports radio reported a back-up at an intersection in Denver caused by a fist-fight that had broken out between two drivers. This country is sliding back into neanderthal times.
The U.S. economic system is slipping into dystopia and the Government/Fed is doing everything it can to try and prevent the process. The two most obvious signs of this are the perpetual market interventions by the PPT to prevent a stock market dump and the relentless propaganda flowing through the mainstream media which originates from the policy-implementing elitists (business and political). Both efforts are insidious attempts to force control over our system
Overnight the S&P 500 e-mini futures were halted twice. The SPX mini is the Fed’s choice intervention tool because it can direct the market with minimal capital requirements. The e-mini is hyper-sensitive to big orders and tends to lead the big SPX directionally because of this. The emini trading was halted after a sudden plunge in the futures at 5:51 a.m. EST, after which a massive buy order (the PPT) hit the tape and spiked the eminis straight up. The market was halted again after the spike up stalled and the emini was about to plunge again. You can see the action here: E-mini Market Halt
The graphic linked above was provided by Nanex’s Eric Hunsader. Prior to the market’s first market halt, Hunsader tweeted: “emini getting tossed around like a rag doll:”
…click on the above link to read the rest of the article…
