U.S. stock markets are rigged, says author Michael Lewis

Re:U.S. stock markets are rigged, says author Michael Lewis by AndrewBissell on Monday March 31, 2014 @12:52AM (#7499716)

> It drops to $49.99, and someone cuts in front of you in line

Um, how do they do that, exactly? The major equity exchanges are all FIFO on every tick price. If you put a limit order in for $49.99 before somebody else, and an offer crosses your bid, you'll get filled before they do, period.

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Re:U.S. stock markets are rigged, says author Michael Lewis by vpeters25 on Monday March 31, 2014 @01:23AM (#7499789)

Let's say you want 100 shares paying no more than $49.99. Your screen shows the following sell orders:

Exchange A: 25 @ 49.99 Exchange B: 20 @ 49.98 Exchange C: 60 @ 49.97

You expect your order to get filled with all shares from C and B and just 20 from A at the highest price, the problem is Exchange A is closest to you, B is 50 miles away, and C is 800 miles away in Chicago.

The HFT bot sees your order arriving at Exchange A, since they have a fastest link to B and C, they buy the orders there and put them on sell to you at $49.99 just a few milliseconds before your order arrives.

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Re:U.S. stock markets are rigged, says author Michael Lewis by snowwrestler on Monday March 31, 2014 @10:46PM (#7505857)

If you put in an order for $49.99, that is the price you said you are willing to pay. It is not fleecing you if someone meets the demand you express.

If you really wanted to pay $49.97 then you should have put in that order instead.

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Re:U.S. stock markets are rigged, says author Michael Lewis by AndrewBissell on Monday March 31, 2014 @02:02AM (#7499897)

This is just a problem with my broker lacking the technical sophistication to synchronize the transmission of my orders in such a way as to ensure the best execution. Whether it's worth it for me to switch to a broker with that capability probably depends on how much volume I trade.

Either way, this problem can be solved much more simply by the application of some simple order timing algorithms than by regulations attempting, in effect, to repeal the speed of light.

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Re:U.S. stock markets are rigged, says author Michael Lewis by iopq on Monday March 31, 2014 @04:21AM (#7500297)

Yes, but it's kind of stupid that they could get away with it in the first place since most people do not have collocation with the exchanges.

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