The Trade discusses what's next for HFT
/HFT was never a business, it was a strategy
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Seaborn introduces Seaspeed for HFT between NY & Sao Paulo
/The fastest connection between NJ and Brazil
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If you can't beat them. Join them
/HFT firm Virtu and AM Union Investment are partnering up.
Read MoreTrading Robots, a human explanantion
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During the slow vacation season suddenly this gem popped up in social media. It is a TEDx talk by Albert J. Menkveld.
Read MoreHFT, much ado about nothing?
/In the grand scheme of things, there might be bigger fish to fry than HFT taking investors money.
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What HFT could do
/HFT and society, Is it enough to explain its social relevance to get accepted as an industry, or is there more HFT could do?
Read MoreHFT and social relevance
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Over the past few years efforts have been made to explain HFT. However, the debate was often very technical or not always very elevating. HFT interest groups should position HFT in society and explain the social relevance.
Read MoreHFT not a basic evil
/Albert Menkveld, wrote a short article on those who consider HFT morally wrong
Read MoreHigh-Frequency Trading around Large Institutional Orders
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When HFTs enter markets, the bid-ask spread declines. Does this benefit institutional investors? Vincent van Kervel and Albert J. Menkveld have done the research.
Read MoreMore similarities between HFT and F1
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There are more similaries than mere speed and heavy competion between F1 racing and HFT.
Read MoreExtremely harsh HFT rules on the horizon?
/More regulation for HFT announced.
Read MoreHFT don't spoof markets, people spoof markets
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A debate on HFT was held at the CFA Institute conference in Frankfurt in April. Panelist included Haim Bodek, in the Netherlands best known for his contributions to VPRO's Tegenlicht documentary on HFT and James Freiss, former white collar crime fighter at the US Treasury.
While the opinions on the matter differed, there were a number of things the panelist could agree on.
First, it is important to understand that HFT in itself is not a strategy, it is a technology. It is nothing more than a tool. HFT as a tool can add liquidity to the markets but it can also be used to for illegal or unethical activities. So, just like with any other tool, it is a question of how to regulate and monitor the people operating the tool and not just condemn the tool itself.
Read the full article here
Putting the Flash Crash in perspective
/Mechanical Markets often hits the nail on the head when writing about the trading industry. In his most recent blog he put the flash crash in perspective as well as underlining the fact that exchanges do require additional safety checks.
You can find the blog here. Check out the other topics as well. It's well worth the read!
An objective look at HFT and dark pools
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Sometimes it takes a knowledgeable outsider to bring some perspective and simplicity to a complex environment. That is especially handy when you only need to learn the essentials without becoming an expert.
Enter, PWC. They wrote a clear and concise position paper on dark pools and HFT. A clear explanation of what these phenomenons are and a list of their advantages and disadvantages.
Read the position paper here
Virtu IPO... food for thought
/A lot has been written and said about the IPO of Virtu and Flow Traders. In his latest post on Mechanical Markets, Kipp Rogers points to some risks topics people often forget when talking about HFT. He hits the nail on the head with his "Expansion in wholly new markets" comment. Interesting read for Monday morning.
Read the full story here.
Dutch newspaper De Telegraaf also published an article about the Flow Traders IPO. You can find it here.
Is the arms race ending as HFT firms merge technologies?
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Last month KCG Holdings (the Knight/Getco combination) announced a joint venture with World Class Wireless, a technology company closely related to Jump Trading, to pool their array of microwave towers worldwide and jointly operate them.
Microwave towers are used by HFT firms to be faster than fiberoptic networks to connect them to the various exchanges.
According to the article in Traders Magazine, it signals a shift in the way HFT firms operate and compete. Over the years, these firms were involved in a technology race to be the fasted firm out there. Huge efforts and huge costs were made. Now the end of this race appears in sight and the costs have come under scrutiny.
According to the magazine it is a sign of a maturing market. Perhaps the local (and more modest) Dutch players can take a page from this scenario and see where they can save costs by combining their technologies. Click here for the full article.
Flash vs Flash
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The IB times reported a law suit today of Chicago HFT firm HTG Capital Partners. They are sueing another HFT firm for 'spoofing' activities in T-Bonds.
The most interesting thing is that consensus among HFT firms is that 'spoofing' does not happen. The name of the other HFT firm is not mentioned.
read the full article here
Regulators have a hard time catching up according to ESMA
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In a statement released on 18 march, ESMA indicated that national regulators have taken big steps in improving the level supervision of HFT.
ESMA correctly stated as well that there is still room for improvement. The trading community is coming up with new technology and software on an almost daily basis and regulators are having a hard time catching up. The skills required to understand the data, the algorithms, the IT, etc do not come cheap and probably you will find the best in HFT.
Innovation is not limited to the trading community. Developments in market infrastructure, new products and international co-operation stress the available resources at national regulators even more.
Spending taxpayers money on financial markets is probably not very popular. However, the alternative is worse.
Read the full ESMA review here.
