HFT: The High Frequency Trading Scam (What's Driving the Market - Good Read)

Seeking Alpha ^ | 7/24/2009 | Karl Denninger

[mojito]

The NY Times has blown the cover off the dark art known as "HFT", or "High-Frequency Trading", perhaps without knowing it.

[mojito]

Although this article first appeared over a year ago, the issues it touches on seem to be driving the activity on the major exchanges to an ever greater extent.

An excellent read for anyone interested in what is happening on Wall Street.

[babygene]

Kind of like having a friend at an auction or ebay that drives the price up.

[Brad from Tennessee]

There was an article posted here last year about Goldman—or one of the other big ones—charging one of its staff or a contractor with the theft of one of its high speed trading programs. The guy was a Russian or East European and it turned out he wrote the program and designed the hardware which involved multiple telephone switches. It was patented in his name. I don't know how it turned out.

[twistedwrench]

I forgot about that, Here’s the latest update I could find on Google

http://www.businessweek.com/news/2010-02-11/ex-goldman-programmer-indicted-over-software-theft-update1-.html

“The proprietary code, worth millions of dollars, lets the company do “sophisticated, high-speed and high-volume trades on various stock and commodities markets,”

“Worth millions”, I think this reporter hit an M instead of a B

[Brad from Tennessee]

Thanks for the update.

[LomanBill]

Hos 12:7
7 The merchant uses dishonest scales;
he loves to defraud.

[crghill]

Aint that the truth.

[TruthConquers]

Yep. That was interesting. Basically, GS’s attorney claimed that the Russian could not be allowed bail because the information could manipulate the markets, straight in open court to the judge.

I have no idea what happened after that, but I remember it was all over at ZeroHedge, at the time.

[Pelham]

HFT is said to account for over 50% of trading these days. HFT is just one more ‘innovation’ that the IBs have worked out that subverts the market and treats small investors as prey animals. You can throw out your Graham and Dodd. Wall Street has gotten to be a casino and a rigged one at that.

[Pelham]

Word.

[jiggyboy]

Excellent post sir.