Re:Did a Stuck Quote Prevent a Facebook Opening Day Pop?
by nanex on Saturday May 26, 2012 @04:47PM
(#4028311)
"HFT makes nothing but money for Nasdaq, and narrows spreads for investors."
HFT makes a pile of money for Nasdaq. But narrows the spread?
Prove it.
Here's one of thousands of examples that shows otherwise.
Re:Did a Stuck Quote Prevent a Facebook Opening Day Pop?
by cma on Saturday May 26, 2012 @05:48PM
(#4028480)
Even if it does narrow spreads, it doesn't matter at the margin. If the spread is 5 pennies on average without HFT, and 1 penny with it, investors are losing out. HFT is charging them a penny to remove a penny of randomness. If someone offered you a a game where you could either:
A) flip nickles: heads you keep get the nickle, tails your opponent gets it B) flip pennies: heads you keep the penny 98% of the time, 2% of the time some other third party gets to keep it (an HFT outfit), your opponent gets it
Would you take A or B?
Re:Did a Stuck Quote Prevent a Facebook Opening Day Pop?
by Drbble on Saturday May 26, 2012 @06:48PM
(#4028628)
Why do non-HFT buyers or sellers deserve the spread any more than HFT buyers and sellers? They pay the same fees you do.
Re:Did a Stuck Quote Prevent a Facebook Opening Day Pop?
by cynicalkane on Saturday May 26, 2012 @07:05PM
(#4028650)
I guess you're a guy from Nanex.
I'm curious why you think I should have to "prove it" if willing buyers are trading with willing sellers on an exchange they chose to trade on. Seems pretty anti-market for a finance company.
Re:Did a Stuck Quote Prevent a Facebook Opening Day Pop?
by nanex on Saturday May 26, 2012 @07:43PM
(#4028734)
You made a false statement. Simple as that.
Re:Did a Stuck Quote Prevent a Facebook Opening Day Pop?
by tedunangst on Saturday May 26, 2012 @09:54PM
(#4028967)
Is there a video that shows us what the spread looks like without HFT?
Nanex always likes to cast HFT as the villain of everything that goes wrong with the market--this is silly. HFT makes nothing but money for Nasdaq, and narrows spreads for investors. It was pretty clearly Nasdaq's job to handle the volume of information and not falter due to such a dumb mistake as other networks kept chugging along.
The same bug also affected trading in Zynga later that day on lower volume when trading closed and re-opened on that stock. This to my mind makes Nasdaq look guiltier. It's like they didn't even test what would happen handling a big cross under load.