171–180 of 237 posts
Anyone know what this quote means? When the SEC called Hunsader in June 2015 to tell him about the award, he said to them "I would have accepted $1 if you simply acknowledged me at the time." Was he initially ignored?
I was ignored by the Trading and Markets people at the SEC, but not ignored (obviously) by the Enforcement people.
Yikes. Lots of misinformation here. First of all, this has nothing to do with High-Frequency Trading. It's about the NYSE not delivering a product (SIP real-time data) while collecting $100M a year for that service. This was happening for at least 3 years. I am a champion of free markets. The term "High-Frequency Trading critic" is a label others use when they either can't understand and/or refute solid evidence. I'm…
Earlier quoted context omitted.
And $5mm seems like a very small penalty to pay for systematically ripping off retail investors. I wonder if there is a valid basis for a class action that could recoup more of the theoretical losses due to the delayed quotation...
Can you explain exactly how this is an instance of NYSE "systematically ripping off retail investors"? Please be as specific as you can.
Earlier quoted context omitted.
Can you explain exactly how this is an instance of NYSE "systematically ripping off retail investors"? Please be as specific as you can.
The article detailed how NYSE provided delayed quotations to it public service. This means that investors without access to the real-time info unknowingly traded at a disadvantage to those who did.
Note: despite the fact that retail investors virtually never trade directly on exchanges, let's stipulate that they always do.
I don't think it's a good thing that the NYSE's feeds were this crappy; that's not what I'm debating.
Earlier quoted context omitted.
Market data is not non-public definition. NYSE was simply slow in aggregating market data during times of high volume. This did not affect you as a retail investor, as you get the NBBO price. This only affected you if you were an HFT firm with bad infrastructure who depended on the aggregate feed and not their direct line. Like tptacek said, the price for getting a direct line, while expensive, is not unreasonable fo…
Are you saying that there is a special market operating in the NYSE that some traders cannot access? Why would my order not be eligible for being matched, but a HFT's would? Edit: wow, rate limited after three posts this morning. A new HN low. My response to tptacek below: My dumb order? How can HFT's intercept and redirect my trades to their, appently, captive pool of dumb trades? Sure sounds like multiple markets a…
As a small trader, you get access to special lower prices that a hedge fund can't get. Your broker will be routing your order to a wholesaler who will fill it at lower prices (ie, narrower spreads) than you would get on the open market, because they have a legal obligation to not screw you over.
You can request that they route it to anywhere you want, and they are legally obligated to do it if you ask, but you really don't want to do that. Unless you like giving money away of course.
(Also, you don't seem to understand basic market mechanics. You use words like "scraped" or "picked up" which are nonsensical in context.)
IEX recently suggested that retail investors should request their broker to route their orders to IEX, for which they got criticised very harshly. And rightly so.
Earlier quoted context omitted.
The article detailed how NYSE provided delayed quotations to it public service. This means that investors without access to the real-time info unknowingly traded at a disadvantage to those who did.
In exactly what way is a retail investor harmed by the kinds of delays that this problem introduced? Please be specific. Note: despite the fact that retail investors virtually never trade directly on exchanges, let's stipulate that they always do. I don't think it's a good thing that the NYSE's feeds were this crappy; that's not what I'm debating.
Earlier quoted context omitted.
> Like tptacek said, the price for getting a direct line, while expensive, is not unreasonable for a business. The largest cost will be salaries for the people writing your code and maintaining your infrastructure. Be that as it may in reality, per below quote I assume that behavior is still illegal. "A crucial sub-ruling in the regulations prohibits exchanges from giving stock quotes to special groups faster than to…
Outside of labor, the primary costs are hardware, colocation, and networking, none of which is a fee to the exchange. Please tell, how the world is supposed to provide that for free to anyone who wants it? Colocated servers are the public.
The consolidated feeds are necessarily slower than the direct feeds, due to processing delays, unless the exchanges intentionally slow down their direct feeds. There are several companies that will sell you expensive FPGA or IBM Cell-based cards that will locally create a consolidated feed from all of the direct feeds. These cards aren't cheap, but are necessary for trading latency arbitrage strategies, and are also useful for low-latency market making.
Of course the consolidated feed requires a slight processing delay, so unless they intentionally slow down the direct feed, quotes from NYSE will appear first in the direct feed and very slightly later in the SIP feed. The argument here is about if the delay between SIP and the direct feed is small enough to be permissible.
The "public" being talked about is the paying public. Nothing in the regulation requires a free SIP feed, and I assure you NYSE doesn't provide a free real-time SIP feed. The regulation is to prevent selling an intentionally slow connection to everyone, and giving a faster feed to only their top tier customers.
Disclaimer: I'm not a lawyer.
Earlier quoted context omitted.
If NYSE wants to lobby for laws to be changed, then they're welcome to do that. Just like Uber or Airbnb when they get hit with fines. But the law's the law. "It doesn't make sense" isn't a valid defense.
Imagine that they're providing free firewood to the public - what obligates them to provide the pickup trucks?
Earlier quoted context omitted.
Are you saying that there is a special market operating in the NYSE that some traders cannot access? Why would my order not be eligible for being matched, but a HFT's would? Edit: wow, rate limited after three posts this morning. A new HN low. My response to tptacek below: My dumb order? How can HFT's intercept and redirect my trades to their, appently, captive pool of dumb trades? Sure sounds like multiple markets a…
Oh boy, you got this 100% the wrong way around. As a small trader, you get access to special lower prices that a hedge fund can't get. Your broker will be routing your order to a wholesaler who will fill it at lower prices (ie, narrower spreads) than you would get on the open market, because they have a legal obligation to not screw you over. You can request that they route it to anywhere you want, and they are legal…
I used the word scrape in response to tptacek's response below my above post. If a trader is not aware that what tptacek describes is happening to their orders, then I believe my characterization is accurate.
Earlier quoted context omitted.
In exactly what way is a retail investor harmed by the kinds of delays that this problem introduced? Please be specific. Note: despite the fact that retail investors virtually never trade directly on exchanges, let's stipulate that they always do. I don't think it's a good thing that the NYSE's feeds were this crappy; that's not what I'm debating.
I don't see a need to pretend that retail investors trade directly on an exchange to show harm. The reason that some firms pay for access to current information is that it gives them an advantage. An advantage against whom? Is this only a matter of HFT firms trading against each other, and they all have access to the same info? Or, is the info asymmetric and someone is disadvantaged in a trade? I have to think that a…
There is no expectation in the markets that everyone is working with the same information, quite the contrary, the markets wouldn't provide value if everyone was working with the same data. One of the chief reasons the markets are valuable is that they give people incentives to surface (in the form of market activities) pricing information they might otherwise keep secret.
> I have to think that at some level, HFT will result in higher prices paid by brokers and their clients
Quite the contrary, it has led to a race to the bottom such that I can trade for free on my phone from anywhere with internet access at spreads that are nearly nothing. Robinhood is only possible because HFT has made it so.
> and directly or indirectly by mutual funds.
Vanguard, the gold standard for low priced mutual funds, completely disagrees with you.