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A comment on For the Love of Money. Parent comment

Re:For the Love of Money by smartbuttcute on Monday January 20, 2014 @11:14AM (#7090205)
The large investment banks actually have a code they can append to their orders so they can jump to the top of the order cue.

That is the definition of "front running".

I'd like to see a 1 cent tax per share per transaction. That'd dramatically limit HFT.

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Re:For the Love of Money by djoldman on Tuesday January 21, 2014 @09:44AM (#7095484)
Anyone connected to Direct Edge can send an order flagged as HideNotSlide. Everyone is playing on an even field with respect to that order type.

HideNotSlide does not cause an order to "jump to the top of the order cue[sic]." It preserves your order entry time at a price that is contra the NBBO if there is not an order at Direct Edge at the NBBO (if there is an order at Direct Edge at the NBBO the incoming HideNotSlide order is filled).

I doubt "HFT" would be dramatically limited by a transaction tax. I believe that it would lower trading volume by some amount and widen the bid/ask by some amount. The number of "HFT" firms and their trading habits would look mostly the same though.

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Re:For the Love of Money by smartbuttcute on Tuesday January 21, 2014 @05:30PM (#7099059)
I visited DirectEdge.com I doesn't appear that the average investor is allowed to join.

http://www.directedge.com/Portals/0/04Support/Membership/EDG...

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Re:For the Love of Money by djoldman on Wednesday January 22, 2014 @09:04AM (#7102543)
You don't have to be a member of the exchange to trade there. You can connect through many outlets, some of whom offer a FIX (Financial Information eXchange) API. You can submit HideNotSlide orders through FIX and perhaps through your brokers' GUIs.

The point is that no special license or membership is required, although you may have to do some work to implement this type of order.

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Re:For the Love of Money by pille on Monday January 20, 2014 @12:03PM (#7090486)
> The large investment banks actually have a code they can append to their orders so they can jump to the top of the order cue.

Source? I believe you but I'd like to be able to quote an authority if I'm telling someone else about this. I've gotten into this HFT debate with colleagues, and I'm pretty sure none of us knew about this nifty trick.

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Re:For the Love of Money by smartbuttcute on Monday January 20, 2014 @12:19PM (#7090566)
This is where I read about it.

http://online.wsj.com/news/articles/SB1000087239639044481270...

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Re:For the Love of Money by harryh on Monday January 20, 2014 @05:28PM (#7092126)
Why would a tax limit HFT and not just push spreads apart by the amount of the tax?
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Re:For the Love of Money by smartbuttcute on Tuesday January 21, 2014 @05:24PM (#7099008)
I had not heard that idea before. I think it might not work because the HFT people are selling just as much as they are buying.
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