High Frequency Trading (HFT) - Next Generation Front-Running

[whipsaw]

Computerized Front-Running: Another Goldman-Dominated Fraud

 

Also called High Frequency Trading (HFT) or "black box trading," automated program trading uses high-speed computers governed by complex algorithms (instructions to the computer) to analyze data and transact orders in massive quantities at very high speeds. Like the poker player peeking in a mirror to see his opponent's cards, HFT allows the program trader to peek at major incoming orders and jump in front of them to skim profits off the top. Note that these large institutional orders are our money - our pension funds, mutual funds, and 401Ks.

 

[...]

 

When "market making" (matching buyers with sellers) was done strictly by human brokers on the floor of the stock exchange, manipulations and front-running were considered an acceptable (if morally dubious) price to pay for continuously "liquid" markets. But front-running by computer, using complex trading programs, is an entirely different species of fraud. A minor flaw in the system has morphed into a monster. Keiser maintains that computerized front-running with HFT has become the principal business of Wall Street and the primary force driving most of the volume on exchanges, contributing not only to a large portion of trading profits but to the manipulation of markets for economic and political ends.

 

The "Virtual Specialist": The Prototype For High Frequency Trading

 

Until recently, most market making was done by brokers called "specialists," those people you see on the floor of the New York Stock Exchange haggling over the price of stocks. The job of the specialist originated more than a century ago, when the need was recognized for a system for continuous trading. That meant trading even when there was no "real" buyer or seller waiting to take the other side of the trade.

 

The specialist is a broker who deals in a specific stock and remains at one location on the floor holding an inventory of it. He posts the "bid" and "ask" prices, manages "limit" orders, executes trades, and is responsible for managing the uninterrupted flow of orders. If there is a large shift in demand on the "buy" side or the "sell" side, the specialist steps in and sells or buys out of his own inventory to meet the demand, until the gap has narrowed.

 

[...]

HFT has quickly come to dominate the exchanges. High-frequency-trading firms now account for 73% of all U.S. equity trades, although they represent only 2% of the approximately 20,000 firms in operation.

 

 

Interessanter Artikel...

geht mal wieder um High Frequency/ Flash Trading und wer die Gesetze im Zeitalter des Algo-Tradings macht.

 

 

[wh]

HFT ist ein interessantes Thema. Aber wo fängt es an oder hört es auf. Es gibt da bei Amazon zwei schöne Bücher.

C++, C++ und eine Reihe von Entwicklern. Ein Kopf reicht da nicht und man braucht ja auch ein Rechnennetz. Habe mich auch mal dafür interessiert. Also wenn algorithmisches Traden HFT ist, dann kann ich auf Matlab verweisen. Einfach mal googeln: Matlab + Trading + Algorithmic und dann alles in C++ portieren und ab geht die Post.

[Roy Awesome]

Hab nach der Überschrift aufgehört zu lesen..

[wh]

Hab nach der Überschrift aufgehört zu lesen..

 

warum weil Banken wie Goldman Sachs die märkte bewegen?

[Roy Awesome]

Weil das mit Frontrunning nichts zu tun hat. Wenn man den CV der Dame betrachtet, stellt sich ausserdem die Frage, was sie dazu qualifiziert, über das Thema zu publizieren.

[Forex Gump]

Wenn man den CV der Dame betrachtet, stellt sich ausserdem die Frage, was sie dazu qualifiziert, über das Thema zu publizieren.

 

 

Darf ich kurz fragen, für was CV steht?

 

Gruß

Forex Gump

[wh]

Darf ich kurz fragen, für was CV steht?

 

Gruß

Forex Gump

 

man sagt auch lebenslauf wenn ich mich nicht irre

Edited June 7, 2010 by wh_

[siscop]

Curriculum Vitae (CV) - Lebenslauf

Hast du zwar bereits beantwortet... Ich wollte CV nur mal ausgeschrieben haben

[Forex Gump]

Danke. Jetzt wo ich es lese; stand wohl gerade auf dem Schlauch und musste erst an Credit Value denken.