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From the Archives: High Frequency Trading Debate: Mano a Mano

Posted by Larry Doyle on May 7, 2010 2:44 PM |

In light of the structural problems displayed in the market yesterday, I believe it is timely to repost a commentary from last July:

In the spirit of continuing the dialogue on high frequency program trading, please view this ‘mano a mano’ debate on CNBC.

In one corner is Joe Saluzzi of Themis Trading. In the other is Irene Aldrige, Managing Partner of Able Alpha Trading.

Mr. Saluzzi initially exposed this activity to the public in late June. Irene views this trading activity as a natural evolution of modern technology.

Please let me know how you score “the fight.”

Additionally, for those interested in further pursuing information on structural issues in the marketplace related to high frequency trading, here is a link to my Review of Sense on Cents Interview with Joe Saluzzi on High Frequency Trading from last August.

LD

  • Juice

    America needs more guys like Joe Saluzzi. It is fairly obvious who is really telling the truth in that debate.

    Irene and her quant geeks have no interest in fair markets.

  • Randy

    I would have to say Juice nailed it with the comments above. The only question worth answering was the last one asked.. wherein it was admitted that certain parties (we all know who they are) are granted co-location and are given data earlier than the other players in the game. Even a Congress person is bright enough to understand that one and if more of the American public were investors/traders in the current environment, there would be a huge public outcry over it. However, since most of the public is still cowering in CD’s and T-Bills since March of 2009, the public reaction is almost non-existent. Instead, the financial elites are working to reduce the leverage available to the average retail players out there in both Forex and eventually also in futures.. so that they will mostly disappear and stop being such a pain in the neck for the big banks and giant hedge funds, etc.

    Saluzzi is such a breath of fresh air..that I almost get sick when I realize how few stand up with him to be counted.

  • Braden

    This so called debate reminded me how much I despise what CNBC has become. I only listen to Bloomberg radio now. This should have been a proper discussion of a vital issue, but instead it was dumbed down immediately by the “hosts” who literally forced the guests into throwing sound bytes at each other. Mr. Saluzzi started to explain why HFT was potentially complicating free markets only to be cut off. “So is it fair or not?” This “good versus bad” approach to journalism is such an elementary school approach. This should have been a discussion of what HFT actually is and how it may have lasting detrimental implications if not stemmed, but the “hosts” intentionally turned it into a shouting match. CNBC is a ridiculous waste of time. Real investors know to stay away.

  • Mike

    That woman was dodging the issue the entire time. She was merely trying to pass off HFT as nothing more than faster execution through computers… Completely dodges the real topic at hand of institutional traders (70& of the market…) knowing exactly where the customers position is before they actually get positioned.

    and NYSE and NASDAQ SELL them this information…. but nothing is wrong with that. What a dumb bitch.

  • Randy

    It really all boils down in the final analysis to fair and equal access to all such that one party is not priviledged above another. Unfortunately, the entire game was designed by the parties currently being favored and they are in monetary and regulatory cahoots with the party that is supposed to oversee the entire process.






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