JOE SALUZZI on high frequency trading-part 2 of 3

Its a good first step that the SEC has taken, but this just scratches the surface, says Joe Saluzzi of co-head of equity trading at Themis Capital, in New York. Inducements from exchanges to traders such as paying a rebate to posters of orders should be abolished, he adds.

He speaks frankly on the subject and this helps us pair out some of the false information out there about high speed trading. It is especially good to see someone saying essentially, well this small fix is good for now, but we have only begun to scratch the surface of what needs to be done.

In addition, he is an effective communicator and brings the subject down to earth.

Category:

Education

Tags:

• High frequency Trading
• Intelligent conversation
• cautionary insight

[SigmaHFT]

Asking Joe Saluzzi on his opinion on HFT is like asking a Klu Klux Klan member on his view on the racial equality directive

[westsan]

@fredocorleone Are you saying that he is taking a klan-like position? GMFB

[ninuxy]

@fredocorleone If you bid for such low price on large scale, aren't you effectively driving the price down?

[shaunshaun88]

90% of traders lose......since most of the traders use algorithms, it also means they are the majority losers....pure technical trading is the best way to trade rather than using codes to trade...

[fredocorleone]

I found that if I put in an opposite, huge order in first - even at an unrealistic bid or sell price that probably won't ever get filled (for example: I bid to buy 50,000 shares at $1.35 for a stock trading at $2 - to counter my real, smaller trade to sell 5000 shares at lets say $2.02 - I can get a good, temporary price bump on my limit sell order,) Then I chuckle to myself, and cancel my "fake", large, counter order after my real limit order gets filled. That's my own algorithm...:)

[nevous8]

This will be a problem in future trading, aside from flash...

But talking about rebate trader - rebates are generally .002 per share. market orders cost about .003 - if ecns gotta fork more dough to let these rebate traders happy market orders will be more expensive. and if its too expensive... who will place a market order?