RSS Feed
Twitter
Facebook
Email
HomeHFT Exposed: Market Is Not Fair; Little Guy Loses
Posted by Larry Doyle on April 8th, 2014 8:53 AM |
Of all the questions on all the topics across all the market segments, the one that keeps being repeated by most investors — both institutional and retail alike — is the question regarding the fairness of the game.
That question and others were posed yesterday to James McCaughan who, as President of Principal Global Investors, just so happens to oversee the management of $300 billion and was interviewed by Tom Keene and Michael McKee on Bloomberg Surveillance.
Regarding market fairness in the midst of current high frequency trading practices, McCaughan does not equivocate in stating, “the market is not fair.” (more…)
Weekend Reading Re: Knight Capital and HFT
Posted by Larry Doyle on August 4th, 2012 7:09 AM |
Investors are constantly confronting the question whether it is safe to go in the water, that is, to commit capital and make an investment.
With so much concern already surrounding the structure of and practices within our equity exchanges, there was serious fuel added to these fires with the malfunction and accompanying meltdown at Knight Capital this week.
This story and situation deserve serious attention. To that end, when I want to know what goes on within the equity markets, I immediately go to the most reliable source. Who is that? Our resident Sense on Cents’ Hall of Famers Joe Saluzzi and Sal Arnuk at Themis Trading. What do these ‘men in the arena’ have to say about the Knight Capital debacle and the structure of the equity markets overall? (more…)
Trading Volumes Plummet, “Choose Not To Play”
Posted by Larry Doyle on March 9th, 2012 8:58 AM |
“The problem here is, when the public becomes aware of the nature of the game, they may choose not to play. This is the problem not only for Goldman but for Wall Street as a whole if people choose not to play.”
I made that statement in the midst of an interview two years ago with CNBC’s Mark Haines (may he rest in eternal peace) about Goldman Sachs. (For those interested you can access that interview here. My comments about Goldman specifically and this topic begin around the 3 minute mark.)
What have trading volumes done on the NYSE over the last two years? (more…)
Attention All Traders and Investors: How Are You Getting Pimped? Here’s How….
Posted by Larry Doyle on January 6th, 2012 10:17 AM |
This commentary is a little lengthy, but for those involved in the markets as a trader or an investor I believe it is a great read. Please share it. LD
The other day I received a very interesting comment and question from a regular reader and active trader. This reader’s prompt compelled me to reach out to our Sense on Cents Hall of Fame legends Joe Saluzzi and Sal Arnuk at Themis Trading for a response.
If you are an active trader or an investor, I STRONGLY recommend you read this commentary. If you merely care about our markets and economy, I also STRONGLY recommend you read it.
Is this how capitalism works now? Is this the best America has to offer in terms of free market capitalism? Excuse me while I vomit. (more…)
“You’re Playing with Sharks”
Posted by Larry Doyle on July 22nd, 2010 6:20 AM |
Is it safe to go in the water? In other words, is it safe to play in the markets under the current construct? Do small retail investors truly stand a chance against the ‘big boys’ on Wall Street running high powered algorithmic trading programs and assorted other high frequency trading mechanisms? Are fundamental traders being thrown around amidst the ‘high waves’ and ‘strong surf’ pounding the shore?
No doubt, the scene on Wall Street has changed dramatically over the years. The onslaught of high frequency trading complete with a wide array of ‘bait and tackle’ such as flash orders, dark pools, naked access, co-location, and much more make it extremely challenging — if not downright daunting — for those who believe they can navigate these waters with simple ‘rod and reel.’ (more…)
Sense on Cents Commends JP Morgan for Standing Up for Long-Term Investors
Posted by Larry Doyle on July 15th, 2010 1:24 PM |
Why are investors increasingly less comfortable putting capital to work in the market? Why are investors increasingly less confident in the very structure of the marketplace itself? The simple fact is the supposed technological advancements embedded in high frequency trading have come with very real costs for long-term investors. The biggest advocate for investors in addressing these real costs has been Themis Trading’s Joe Saluzzi. I interviewed Joe twice over the last year and have referenced his work often. I commend Joe for often being the lone wolf within the industry crying out on these critically important issues.
Well, Joe now has company in the form of a very, very, very large wolf. Who might that be? None other than JP Morgan. Thanks very much to a regular reader of Sense on Cents for pointing out a story, JP Morgan’s Views On The Five Best Things About the Flash Crash, that ran yesterday at the fabulous site Zero Hedge. (more…)
Fannie and Freddie Ordered to Delist from NYSE
Posted by Larry Doyle on June 16th, 2010 11:28 AM |
Fannie and Freddie don’t live here anymore.
News just broke that the stocks of our two government stepchildren, Fannie Mae and Freddie Mac, have been ordered to delist from the NYSE. The Washington Post reports, Fannie Mae, Freddie Mac to Delist Shares from NYSE:
The companies’ regulator, the Federal Housing Finance Agency, said Wednesday that it expects Fannie Mae and Freddie Mac shares to trade on the Over-the-Counter Bulletin Board, an electronic quotation service. (more…)
Financial Times Highlights Great American Joe Saluzzi
Posted by Larry Doyle on May 26th, 2010 12:31 PM |
Confidence in the markets and the economy is ultimately a function of truth, transparency, and integrity.
The reason global investors have such little confidence currently is due to the very simple fact that both the financial industry and their government counterparts have not promoted practices which embrace these cherished principles.
That is not to say that each and every individual in the financial industry or in government does not try to promote these values. In fact, I believe the overwhelming majority of people on Wall Street and in the global markets do embrace these values, but they are not in a position to speak out when the principles are violated. I love it when I come across people who possess the courage and are unencumbered to speak out for the truth, transparency, and integrity our markets, our country, and our world so badly need. Like who? (more…)
Joe Saluzzi Exposes ‘Theft on Wall Street’
Posted by Larry Doyle on May 14th, 2010 9:17 AM |
Themis Trading’s Joe Saluzzi was designated a Sense on Cents Hall of Fame medalist this past January. Mr. Saluzzi has once again distinguished himself by providing a significant degree of transparency into the technical structures of our seriously flawed equity exchanges.
A recently released white paper, Exchanges and Data Feeds: Data Theft on Wall Street,written by Joe and his colleague Sal Arnuk at Themis Trading is getting a LOT of attention on Wall Street and in Washington. I welcome highlighting and bringing this 3-page paper to Main Street. If you have any interest in the markets and our economy, this paper is a MUST read. Allow me to whet your appetite: (more…)
What We Learned from the May 6th Market Plunge
Posted by Larry Doyle on May 11th, 2010 7:55 AM |
Like leading sheep to the wolves, the manner in which high frequency trading activity has grown to dominate our equity markets is nothing more than a trap. How has that trap worked? Stay on message and continue to promote the premise that high frequency trading adds liquidity to the market. Time and time again, America would hear from quantitative traders and their analysts engaged in high frequency trading that these programs would provide consistent liquidity from which retail investors would benefit.
What a crock!! That said, the HFT activity itself is not to blame for the market plunge. The programs behaved as they were designed. That is, during periods of extreme volatility, those running the programs would simply shut down the machine. Is that liquidity? No, I don’t think so.
Never again should America have to listen to anybody engaged in high frequency trading and hear them say these systems provide liquidity to the market. They don’t. (more…)
