https://petitions.whitehouse.gov/petition/ban-market-exchanges-giving-high-frequency-traders-faster-market-access-and-front-running-orders/h8lknDy1

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Won't sign it -- automated trading has the potential to cause chaos and flash crashes, and those things represent opportunity.

A system of fraud for those who cant be controlled by govt, Wall Street invented a new board game which has a trading floor that enpowers a select few .The financial scare of 2009 was a successful attempt to bring the old system down and if a petition such as this came up it would surely fail due to shaky kneed politicians who are really smiling puppets .Their is nothing like bringing the biggest economy to its knees and knowing you have complete control with no reprocutions.Its right to think of it as a casino ,the winners are always the house who can manipulate behind closed doors. If you were to ask another individual from a far away land what their thoughts were about America ,Greed would be one of the top 3.A very short time ago the FIRST word used was Opportunity . We have lost enfluence around the world and it shows .

Has anyone read about this? I heard a report that for bigger trades the system is gamed. I have not had time to research.

The story goes: A large volume trader makes a buy of 10,000 (or whatever) shares of x. His buy request goes out to the exchange and any of several brokerages will snap up as many of the 10000 shares as possible based on his trade. They mark it up and resell it to the buyer who ends up paying the marked up price instead of the bid price. This is essentially multiple commission paid to the the large brokerage houses. - and - this all happens between the time the order is made and filled – typically seconds or less. It is a scam on buyers and pure profiteering by the brokerage houses. And completely legal at this point. As I understand it the petition would put a stop to this practice.

HFT allows for front running. you kinda got the concept correct link, but it's a little different.
It's not more commissions, it's a higher bid price.
For example. the 10,000 shares of peachparts stock that you want to buy. You place your order. (And anyone using Goldman Sachs online software unwittingly is giving GS front runnign info.) the HFT will buy that stock before you buy it, most often causing the price to rise a penny or two, then sell it to you.

BUT the more ugly aspect of HFT is when a SELL order to sell 100,000 shares of peachparts gets placed, then milliseconds later canceled, that order will cause other HFT algos to lower the ASK price of peachparts stocks, causing others to SELL, SELL, SELL.

Now you may ask yourself, how many people trade in peachparts stock, surely not that many, but then replace peachparts stock with, umm say Gold,,,

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Closing the store
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^Thanks for the description. It still amounts to a scam on both sides of trades.

As long as you're using limit orders who cares how many times the shares change hands?

I agree with mespe's sell side scenario, though.

Sounds like a great way to have another big crash. I don't invest in stocks because I believe unless you have a lot of capital and really know what's going on with the market makers your just on the outside trying not to get stomped.

Its no different than the real estate market, a few people in every area have the inside track on info and deals and make 90% of the money.

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1999 SL500
1969 280SE
2023 Ram 1500
2007 Tiara 3200

We should have tax structure to discourage short term speculating. The longer you keep an item (stock, real estate, whatever) the lower your tax. If you keep it less than a week, 100% tax, and it goes down from there until at ten years its 15%, like now.

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[SIGPIC] Diesel loving autocrossing grandpa Architect. 08 Dodge 3/4 ton with Cummins & six speed; I have had about 35 benzes. I have a 39 Studebaker Coupe Express pickup in which I have had installed a 617 turbo and a five speed manual.[SIGPIC]

..I also have a 427 Cobra replica with an aluminum chassis.

Just finished the book "Flash boys" by Michael Lewis that started this whole conversation.

The book is a great read, and the practice of HFT as used today is criminal.

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Paul S.

2001 E430, Bourdeaux Red, Oyster interior.
79,200 miles.

1973 280SE 4.5, 170,000 miles. 568 Signal Red, Black MB Tex. "The Red Baron".

Worlds biggest pyramid scheme. What matters is the level you got in on

Just adding to the ranks of those who dip a tiny scooper into a huge revenue stream and manage to divert serious wealth into their pocket w/o actually providing a good or service of any value. On some level not much different than welfare/Medicare cheats or counterfeiters.

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1986 300SDL, 362K
1984 300D, 138K

The way to make money is not to go with what's popular (unless you're willing to bail at short notice), but to go with what's UNpopular and has good fundamental value.

Automakers in 2008. REITs in 2009. Solar firms in 2011-2012.

HFT's provide liquidity to the market. Without it, spreads could get so wide that volume decreases. Traders rely on turnover liquidity to gain better entries and exits. This practice has been going on for years, but the most recent publicity has provided a biased viewpoint of who it is really hurting. The home gamer who decides to baghold CAT @ 100.01 for god knows how long will now have an average entry @ 100.011 for his mere 1k offer. I doubt this will lead to any significant regulation in the future.

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1982 300TDT
1991 190D
2022 Metris

Providing liquidity and front-running are two different subjects.

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Paul S.

2001 E430, Bourdeaux Red, Oyster interior.
79,200 miles.

1973 280SE 4.5, 170,000 miles. 568 Signal Red, Black MB Tex. "The Red Baron".