
Regulators Bring a Strange Spoofing Case - dsri
http://www.bloombergview.com/articles/2015-10-21/regulators-bring-a-strange-spoofing-case
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princeb
maybe the knee jerk reaction on HN is to think 'HFT' but this really isn't.

although i have to say 400ms to place an order, cancel it, and place a new
order in the opposite direction (or 2 actions using the cancel-if-cross - all
manually as it appears - is pretty fast. high frequency finger clicking,
maybe, but definitely not high frequency.

the cftc is going after this guy for the behaviour that resulted from the
avoid-orders-that-cross feature that was available on that guy's commercial
trading platform (the application is TT and it's used everywhere), and in the
sarao case they went after his cancel-if-close behaviour too (that too is
sort-of available direct from some exchanges - pegged order). i hope they know
that the industry has plenty of available tools to help the average joe do
things like these because they have their own meaningful (but specific)
purpose in day to day trading. in this particular case- cme and a lot of other
exchanges really really don't like it if you cross your own orders. it reeks
of wash trading. this is just a tool to make it really simple, because
sometimes a firm has multiple traders that have different trades they want to
put on and you can't always be sure they won't cross each other.

sometimes i wonder if the tools proliferate these malicious behaviour or if
the malicious behaviour proliferate these tools. i suspect a lot of market
participants are engaging in very "aggressively defensive" behaviour to
counter things like these. in any case the microstructure has changed quite a
bit in as quickly as the last 10 months and it looks like that is going to be
the new normal rate of change.

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chris_wot
I realise the guy isn't a HFT, but that seems to be how he is being treated.

What EXACTLY does high frequency trading contribute to society? Genuine
question.

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bsder
> What EXACTLY does high frequency trading contribute to society? Genuine
> question.

Liquidity.

Buy and hold traders are wonderful--until you want to sell your stock. Too
many buy and holders and the liquidity disappears.

Several of the big companies found this out the hard way when opened special
trading desks for their privileged clients to avoid those "dirty HFT traders".
Everybody wanted to buy; nobody wanted to sell; there was no liquidity. They
had to let some HFT folks in to make the markets.

Now, we can argue that HFT below some threshold of delay (10 minutes? 1
minute? 1 second? 1 millisecond?) is useless and counterproductive. However,
the people trading quickly make the liquidity that the buy and hold folks rely
on.

