A new article by Traders Magazine goes on to describe in exquisite detail how brokerages apparently have not only never used Flashed orders, but run like the plague any time the topic is even breached.
Quote Greg Tusar, head of U.S. electronic transaction at GSEC:
"We don’t use them in the execution of client orders," Tusar said. "But we believe it should be a matter of choice--that clients should have access to them if they choose to. They should be available on an opt-in basis, client by client."
Not to make a fine point out of it, but isn’t it a little presumptuous to say you don’t Flash when your entire Sigma X Dark Pool is based on Flashing (granted Goldman is the only beneficiary of the Flashed order data)? If we are not understanding this correctly, please feel free to enlighten us on how we may have misunderstood this: SigmaX@zerohedge.com
Other professionals who chime in include none other than Jatin Suryawanshi, head of global quant strategies at Jefferies & Company:
"Flash orders have the potential to cause information leakage. It’s information that was not available on a data feed that’s now available on a data feed." He added that the use of flash orders, if it’s not done purposefully to aggressively take liquidity, may fly in the face of a broker’s best-execution duties.
Well, at least one insider is happy to acknowledge the potential abuse of Flash. Uhm, why did it take all you guys years before coming forward with this knowledge? Does some blog have to disclose all your dirty laundry before you admit that a vast majority of your business models are based on "information leakage?" But then again Jatin’s honesty may be attributed to his recent distraction, stemming from the escalating lawsuit with UBS alleging serious quant espionage. And here we were thinking that only Sergey Aleynikov is in trouble.
Which bring us to Dan Mathisson, head of Advanced Execution Services at Credit Suisse.
"We don’t flash," said Dan Mathisson, head of the Advanced Execution Services group at Credit Suisse. "The whole reason we exist is to try to execute [institutional
You recently approached SEC head Mary Schapiro with some very valid concerns about Flash trading, and the potential for investor abuse by advance looks to select market participants ahead of the general order pool. Your crusade was subsequently enjoined by such equity market luminaries as Robert Greifeld, president and CEO of the Nasdaq Stock Market, who had this to say regarding not just Flash trades in particular, but numerous other components of market topology, whose sole purpose is to obfuscate natural order flow and to provide loopholes for dominant market players to extract inefficiencies (i.e., scalp regular investors) arising from established and SEC-endorsed mechanisms of efficient market circumvention:
"Flash orders, which are a fundamental part of high-frequency trading, are but one symptom of the current evolving market structure. Nasdaq OMX is concerned that the securities industry appears willing to accept more and more ‘darkness’ and limits on the availability of order information. Instead, the policy goal should be clear: to eliminate any order types or market structure policies that do not contribute to public price formation and market transparency.”
"The industry has a unique opportunity at this time to take a hard look at dark order types and the underlying market structure issues that do not support public price information.”
Senator Schumer, while Zero Hedge applauds your initiative, the truth is that the wrongdoing in the context of potential investor market abuse runs far deeper and is much more pervasive than you realize. And while one can highlight the merits of the Op-Ed published in the New York Times earlier by quant titan Paul Wilmott entitled "Hurrying Into The Next Panic" (a recommended read for you and your staff), which notes numerous frightening implications brought about by the domination of Hiqh Frequency Trading, let us stick within the context of advance looks, which is at the basis of your letter seeking the ban of Flash-like behavior.
Zero Hedge would like to highlight that while your letter to Mary Schapiro indicated your concern with such market actors as DirectEdge, BATS and Nasdaq, the truth is there are substantially larger and more dangerous "fish" on which you should focus your attention.
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at firstname.lastname@example.org with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
With the subsequent release of the Consumer Price Index, we can now dig a bit deeper into the "real" data, adjusted for inflation and against the backdrop of our growing population.
The first chart shows the complete series from 1992, when the U.S. Census Bureau began tracking the data in its current format. I've highlighted recessions and the approximate range of two major economic episod...
"They know Baghdad. They've lived in Baghdad," said Lt.Col Oliver North, warning over the weekend that sources in Iraq believed ISIS was planning a "major attack" against the embassy in Baghdad. Yesterday we get some confirmation - via ISIS - that they did in fact reportedly strike the U.S. embassy in Baghdad. As Inquisitr reports, on Tuesday the Islamist militant group took credit for a mortar attack against the embassy in Baghdad. The group bragged about the attack on social media, claiming that there were likely casualties - “Four rockets strike Green Zone in #Baghdad; helicopters hovering over the Green Zone; ambulances heading that way after strikes!!” one ISIS mil...
IBM, Coca-Cola and McDonalds are three of America’s largest corporations and most well-known brands. They are true multinationals in every sense of the word and they dominate their industries both at home and abroad. They are numbers 23, 58 and 106 on the Fortune 500 list, respectively. Together, they make up 12 percent of the Dow Jones Industrial Average’s total weighting.
And all three are plagued by the same problem – they’re shrinking. More than this, their shrinkage is finally being recognized on The Street, now that investors are peeling back all of the layers of buybac...
Last week brought even more stock market weakness and volatility as the selloff became self-perpetuating, with nobody mid-day on Wednesday wanting to be the last guy left holding equities. Hedge funds and other weak holders exacerbated the situation. But the extreme volatility and panic selling finally led some bulls (along with many corporate insiders) to summon a little backbone and buy into weakness, and the market finished the week on a high note, with continued momentum likely into the first part of this week.
Despite concerns about global economic growth and a persistent lack of inflation, especially given all the global quantitative easing, fundamentals for U.S. stocks still look good, and I believe this overdue correction ultimately will shape up to be a great buying opportunity -- i.e., th...
Now that bitcoin has subsided from speculative bubble to functioning currency (see the price chart below), it’s safe for non-speculators to explore the whole “cryptocurrency” thing. So…is bitcoin or one of its growing list of competitors a useful addition to the average person’s array of bank accounts and credit cards — or is it a replacement for most of those things? And how does one make this transition?
With his usual excellent timing, London-based financial writer/actor/stand-up comic Dominic Frisby has just released Bitcoin: The Future of Money? in which he explains all this in terms most readers will have no tr...
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What do falling energy prices mean for the US consumer? Sober Look writes a brief yet thorough overview of the consequences of the correction in the price of crude oil. There are good aspects, particularly for the consumer, bad aspects, and out-right ugly possibilities. For more on this subject, read James Hamilton's How will Saudi Arabia respond to lower oil prices? In previous eras, Saudi Arabia would tighten the supply to help increase prices, but in this "game of chicken," the rules m...
Shares in Apple (Ticker: AAPL) are near their highs of the session in the final hour of trading on Wednesday, adding to the muted gains seen earlier in the day, following the release of the September FOMC meeting minutes and after activist investor and Apple shareholder Carl Icahn tweeted, “Tmrw we’ll be sending an open letter to @tim_cook. Believe it will be interesting.” Icahn’s tweet hit the ether at 2:33 pm ET and was met with a spike in volume in Apple shares. The stock is currently up 2.0% on the day at $100.75 as of 3:15 pm ET.
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Well PSW Subscribers....I am still here, barely. From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.
First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices. Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment. Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer. For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...
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