Announcement

Collapse
No announcement yet.

High Frequency Trading (HFT) and Flash Orders explained in 12 min.

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • High Frequency Trading (HFT) and Flash Orders explained in 12 min.

    Oh no, that stock market thing is not a giant Casino. :rolleyes:

    No sir, that is investing! [with odds stacked against you].


    Runtime: 12min.

    High-frequency trading from Marketplace on Vimeo.


  • #2
    Re: High Frequency Trading (HFT) and Flash Orders explained in 12 min.

    Last week I timed a trade perfectly to sell at the top of the market. Unfortunately, I must have hit buy. Nobody payed more all day. The trade was perfectly timed, but poorly executed.

    Comment


    • #3
      Re: High Frequency Trading (HFT) and Flash Orders explained in 12 min.

      nice find Largo - thanks for sharing
      --ST (aka steveaustin2006)

      Comment


      • #4
        Re: High Frequency Trading (HFT) and Flash Orders explained in 12 min.

        Originally posted by LargoWinch View Post
        Oh no, that stock market thing is not a giant Casino. :rolleyes:
        i wouldn't call it a casino...it's an auction market, a place for price discovery...

        why is the institutional investor (in this example) supposed to have preferential treatment to buy GE at $24.50 [which is basically what the presenter is implying]?

        for just a minute, remove the "High Frequency trader" from the equation...

        what about the person selling GE? if the person selling GE is also an institutional investor, why don't they have a right to sell it at the higher price of $25?

        which investor should benefit from that $.50 differential? i say neither...they should submit bids and offers until they reach a price they agree to...does the high frequency trader not offer a quicker way to discover the right price?

        Comment


        • #5
          Re: High Frequency Trading (HFT) and Flash Orders explained in 12 min.

          also, i didn't quite get his automated market making example...

          he said the market was at 24.50 and the investor would buy up until 25.00

          in the market there is an order book with all sorts of offers to sell shares between 24.50 and 25.00

          i assume the investor would submit limit orders with max price at 25.00 but he would get filled if the market price was less than or equal to 25.00

          thus i didn't quite understand how the automated market maker would "get a bite" at 25.00 if the market was lower than that. the investor wouldn't buy at 25.00 if the order book was at 24.50 or 24.60 or 24.70.

          the investor would keep buying through the order book until he hit the market maker's 25 price. the idea that the market maker would sell at 25 and then buy up the rest of the shares and sell all the rest to the investor at 25 didn't make sense. why wouldn't the investor bought at a lower price all along if there were offers in the market to do so??

          am i missing something?

          Comment


          • #6
            Re: High Frequency Trading (HFT) and Flash Orders explained in 12 min.

            Originally posted by pescamaaan View Post
            also, i didn't quite get his automated market making example...

            he said the market was at 24.50 and the investor would buy up until 25.00

            in the market there is an order book with all sorts of offers to sell shares between 24.50 and 25.00

            i assume the investor would submit limit orders with max price at 25.00 but he would get filled if the market price was less than or equal to 25.00

            thus i didn't quite understand how the automated market maker would "get a bite" at 25.00 if the market was lower than that. the investor wouldn't buy at 25.00 if the order book was at 24.50 or 24.60 or 24.70.

            the investor would keep buying through the order book until he hit the market maker's 25 price. the idea that the market maker would sell at 25 and then buy up the rest of the shares and sell all the rest to the investor at 25 didn't make sense. why wouldn't the investor bought at a lower price all along if there were offers in the market to do so??

            am i missing something?
            If a party obtains trade data before the market as a whole - even for a fraction of a second - they can generate risk-free money.

            The term for this not so new trick is called "front running".

            Simple as that.
            Last edited by LargoWinch; August 18, 2009, 10:18 PM.

            Comment

            Working...
            X