diegosanaz
BU MSMF
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- 9/3/12
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Hey, just to ask, how did you guys reacted to this rumor? Was anybody able to make a profit??
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Explosion rumor
- Thread starter diegosanaz
- Start date
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- 5/2/06
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Another Twitter account got hacked. Market dipped and recovered.
http://thecaucus.blogs.nytimes.com/...-message-about-explosions-at-white-house/?hpw
On another note, I have enabled two factor authentication for my account here on QuantNet.
You can do the same thing to protect yourself too.
https://www.quantnet.com/account/two-factor
http://thecaucus.blogs.nytimes.com/...-message-about-explosions-at-white-house/?hpw
On another note, I have enabled two factor authentication for my account here on QuantNet.
You can do the same thing to protect yourself too.
https://www.quantnet.com/account/two-factor
diegosanaz
BU MSMF
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- 9/3/12
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Trade-off: people rather be fast than smart. This is another reason why I´m not into HFT.
- Joined
- 5/20/12
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The reaction isn't the problem its the speed.
Look at how these wonderful algo's that are supposed to be responsible for providing liquidity take it away in a split second, they are not doing their job of a fair and orderly market
http://www.nanex.net/aqck2/4176.html
http://www.zerohedge.com/news/2013-...te-evaporation-all-market-liquidity-one-chart
Look at how these wonderful algo's that are supposed to be responsible for providing liquidity take it away in a split second, they are not doing their job of a fair and orderly market
http://www.nanex.net/aqck2/4176.html
http://www.zerohedge.com/news/2013-...te-evaporation-all-market-liquidity-one-chart
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Wow, you must be extremely fast to make a profit
AndrewChang
Baruch MFE Alum
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The move was literally in minutes level. Don't have to be that fast.
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I´d say the point is not whether it is possible or even if someone did profit from this jump... but the consequences from algotrading, trying to create a signaling algo to trade on twitter rumors, etc.
because really... just using 2 brain cells to think, it would take any trader a 1/4 of a sec to check the info was not true. read on twitter, turn to cnbc, bloomberg channel, cnn, or whatever, don´t you think that if something this big really happened the whole world would turn to it instantly? i mean, every tv channel in the world had put their reporters to check this info, right away!! but in the mean time, algotraders were triggering stoploss orders with their heavy selling.
because really... just using 2 brain cells to think, it would take any trader a 1/4 of a sec to check the info was not true. read on twitter, turn to cnbc, bloomberg channel, cnn, or whatever, don´t you think that if something this big really happened the whole world would turn to it instantly? i mean, every tv channel in the world had put their reporters to check this info, right away!! but in the mean time, algotraders were triggering stoploss orders with their heavy selling.
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In this case believe it or not, traders at my firm did make a profit. One of our head traders saw this huge spike down, saw the change as the liquidity started coming back, watching the T&S in the equity markets and basically bought 2000 shares of spy at 156.00 and sold it at 158.00 in a matter of seconds.
Humans could not have triggered it because of the massive drop in liquidity across all markets at the same time.
It would take at least a few minutes for firms to pull their bids across many asset classes and across different divisions.
Basically liquidty in everything vanished in a mater of seconds, the spys, futures, everything this coordination can only be achieved by a machine
Humans could not have triggered it because of the massive drop in liquidity across all markets at the same time.
It would take at least a few minutes for firms to pull their bids across many asset classes and across different divisions.
Basically liquidty in everything vanished in a mater of seconds, the spys, futures, everything this coordination can only be achieved by a machine
diegosanaz
BU MSMF
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I didn't make a profit. Actually, I was lucky that none of my stops were triggered.
Lyosha
Psychic in Training
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Wow, the misinformation! My head just literally exploded.
Jesus man read a book about algorithmic trading before voicing such forceful (and just dead wrong...) opinions...
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Sorry buddy but it looks like you're point of view can't really hold up in the face of real evidence.
http://blogs.marketwatch.com/thetell/2013/05/21/fed-official-urges-a-slowdown-to-high-speed-trading/
AndrewChang
Baruch MFE Alum
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That still doesn't prove your point that humans could not have triggered the massive drop in liquidity.
And this is the first time I saw someone in finance complaining that they cannot compete. Doesn't sound like people in finance to me. Sounds like their occupations has unions....
Lyosha
Psychic in Training
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Where is the "real evidence" there? Just some guy pissed no one will absorb his 2 yards of SPX futures anymore without impact.
The world changes. As it turns out the human market makers were not pricing liquidity risk correctly. Computers do a better job. Then again, spreads are the tightest they've ever been because of this. If you interact with the market in an intelligent fashion, you'll be perfectly fine and your slippage will have dropped. If you drop two yards on the open market, well, bad things happen.
The drop was 17 seconds after the announcement. Algos take 10-40 ms at most to process news. 17 seconds is in human time. Definitive evidence. Arrest the trader who did it for market manipulation.
Before blaming high frequency traders, perhaps you should start by analyzing the error in your own ways. If you think algos are hurting you, hire an execution desk to do your trades for you.
- Joined
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The HFT debate is something that has occurred repeatedly throughout history over a variety of issues.
First, a group of individuals creates something (a new way of thinking, a product, a manufacturing method etc.) that completely changes the face of a country or industry. This creation could be economic (assembly line, stocks, 3D printing), cultural (gay marriage, abortion, contraception, abolitionism) or political (republicanism in Europe, women's suffrage). For the sake of not having to write a small essay I'm going to limit myself to the economic case.
Second, the invention causes massive disruption within the economy and society.
Third, another group (usually stakeholders in the old system that is threatened) calls for the ban of said invention due to its general effect on competitiveness and/or the destabilizing effect that it is having on society and the economy.
Fourth, there are riots/strikes/debates within government/flame wars on the internet.
Fifth:
Case 1: A complete ban is instituted, which usually results in the creation of a massive underground economy and more instability (illegal drugs in the USA).
Case 2: No regulation, which usually results in negative unforeseen consequences (south sea bubble and insider trading, Great Depression and credit).
Case 3: Through debate, compromise and pain a middle ground is reached. In the economic case this would be a mix of free market and regulation.
In my opinion the best case is case 3, and it seems to be the case towards which we are headed. That being said it is the most difficult option as the "ideal" mix of free market and regulation for any disruptive technology is something that is non-obvious.
As JulianT once told me (paraphrasing) "We're living in a time that'll be a case study in textbooks; whether or not the future views our actions favorably is another matter entirely".
First, a group of individuals creates something (a new way of thinking, a product, a manufacturing method etc.) that completely changes the face of a country or industry. This creation could be economic (assembly line, stocks, 3D printing), cultural (gay marriage, abortion, contraception, abolitionism) or political (republicanism in Europe, women's suffrage). For the sake of not having to write a small essay I'm going to limit myself to the economic case.
Second, the invention causes massive disruption within the economy and society.
Third, another group (usually stakeholders in the old system that is threatened) calls for the ban of said invention due to its general effect on competitiveness and/or the destabilizing effect that it is having on society and the economy.
Fourth, there are riots/strikes/debates within government/flame wars on the internet.
Fifth:
Case 1: A complete ban is instituted, which usually results in the creation of a massive underground economy and more instability (illegal drugs in the USA).
Case 2: No regulation, which usually results in negative unforeseen consequences (south sea bubble and insider trading, Great Depression and credit).
Case 3: Through debate, compromise and pain a middle ground is reached. In the economic case this would be a mix of free market and regulation.
In my opinion the best case is case 3, and it seems to be the case towards which we are headed. That being said it is the most difficult option as the "ideal" mix of free market and regulation for any disruptive technology is something that is non-obvious.
As JulianT once told me (paraphrasing) "We're living in a time that'll be a case study in textbooks; whether or not the future views our actions favorably is another matter entirely".
