“ON A LONG ENOUGH TIMELINE, THE SURVIVAL RATE FOR EVERYONE DROPS TO ZERO”
Hey Ron, didn’t realize your new position as a contributing editor onCNBCcame with the contributing title of “Portfolio Manager.” Didn’t Stevie put a one yearkibboshon that? But I digress… And in all honesty I am surprised that you seem to have the correct spin on things (as per letter below from JimCramer’sfailed media experimentTheStreet). When you say:
I’d prefer that regulators look into whether a firm like Goldman Sachs (GS) unfairly view [sic] order and information flow ahead of its customers and clients.
we are pleasantly surprised… Yet when you follow up by saying:
we are totallyecstaticthat you do not lump us into the definition of that derogatory word. Then again, feel free to do a search for”Goldman Sachs” here. Even an erudite portfolio manager such as yourself may learn a thing or two.
The New York Times and The Wall Street Journal are taking aim at a new form of computerized trading known as “High Frequency” trading. The algorithm-based trading is allegedly an illegal form of front-running, as high-frequency traders hook into exchange computers and use “flash trades” to suss out incoming order flow and use the lightning speed of their own programs to jump ahead of customer orders. Critics argue that individual investors are at a distinct disadvantage for this reason and a variety of others. The proximity of high-frequency computers, which can be placed next to exchange computers for a fee, allows for an almost-osmotic transfer of information. Senator CharlesSchumer(D, N.Y.) is asking the SEC to ban “flash trades,” which are phony orders placed by high-frequency programs that aim to fool market participants into entering orders. The programs jump in front of customer orders and gain a trading advantage. If that is indeed what is happening, it qualifies as “front-running,” an illegal practice on Wall Street. If high-frequency traders are just faster than everyone else and
সূত্র: ZeroHedge
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