Posted on 06/20/2010 6:13:49 PM PDT by combat_boots
Now more than a month beyond the "flash crash", and having seen the "gun the market" games of the HFT boys for more than two years, it is time to call "full stop" to this arms race.
The markets are supposed to be a place where capital is formed and price discovered. Neither is served, and much damage is done, by sending false signals of liquidity in the marketplace, as HFT proved during the "flash crash."
Second, and at least equally-important, the HFT "algos" are severely-distorting the price discovery mechanism. Let's take a hypothetical security, "FRO" (Frobozz Corporation) and snapshot the "order book" at a moment in time.
(Excerpt) Read more at market-ticker.org ...
It was a cyber attack from outside the US either Russia or North Korea
If you look at what’s happening in the stock market the past few weeks, you soon notice that volume remains a trickle (people proclaim that volume is actually higher today than five years ago, but 70% of market volume today is HFTPs).
People know what’s happening in the background. That’s why they’re not participating in it anymore.
Note of course that where genuine reform is required to help the capital markets perform their intended function, that you will not see the Obamunists are any of their Democrat minions waste one penny of the political capital they already have allocated for the ideological destruction of our nation.
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