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View Diary: Krugman On "The Joy Of Sachs," As Frontrunning Truths Emerge (292 comments)

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  •  NB Brooks gave me some information on that (1+ / 0-)
    Recommended by:
    geodemographics

    in a diary I did yesterday.  This may help.

    Lambert on Correntewire.com linked to the detailed analysis by Themis Trading, Toxic Equity Trading Order Flow on Wall Street: The Real Force Behind the Explosion in Volume and Volatility, by Sal L. Arnuk and Joseph Saluzzi. Quotes:

     

    . . . electronic trading, the new for-profit exchanges and ECNs, the NYSE Hybrid and the SEC’s Regulation NMS have all come together in unexpected ways, starting, coincidently, in late summer of 2007.

       This has resulted in the proliferation of a new generation of very profitable, high-speed, computerized trading firms and methods that are causing retail and institutional investors to chase artificial prices. These high frequency traders make tiny amounts of money per share, on a huge volume of small trades. . . .

       This paper will explain how these traders – namely liquidity rebate traders, predatory algorithmic traders, automated market makers, and program traders – are exploiting the new market dynamics and negatively affecting real investors. We conclude with suggestions on what can be done to mitigate or reduce these effects. . . .

       High frequency trading strategies have become a stealth tax on retail and institutional investors. While stock prices will probably go where they would have gone anyway, toxic trading takes money from real investors and gives it to the high frequency trader who has the best computer. The exchanges, ECNs and high frequency traders are slowly bleeding investors, causing their transaction costs to rise, and the investors don’t even know it.

    The Democrats are the new Republicans. Congressional Corporate Whores peeing on our shoes and telling us its raining.

    by Badabing on Fri Jul 17, 2009 at 04:46:57 PM PDT

    [ Parent ]

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