Skip to comments.One Algorithm Made Up 4% Of All Trading Last Week, And No One Knows Where It Came From
Posted on 10/08/2012 2:26:11 PM PDT by blam
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It stands to reason that the trading system must account for all trade activity, whether executed or cancelled. Whoever hired the math wizards that put this together is trying to influence the market and/or profit from another computer's reaction to their feint.
If you figure out what all this means, let me know : )
I may be mistaken, but I believe what was involved in the 1987 crash was simple automated computer trading...the decline levels exceeded the parameters of the programs, and since they had no floors or stops included they just kept selling and fed into the downward spiral.
High-frequency trading that effectively games the exchanges is a comparatively recent phenomenon, within the last few years.
I understand. I was referring to autonomous computers for trading in general. I remember a year or two ago Goldman went after some Russian national who had designed and patented one of their systems. It incorporated multiple telephone switches. The guy ran off with the schematics and copies of the software. They caught him and he was indicted. But the story gave a glimpse of how these systems could issue then cancel orders in a millisecond.
“Agree 100%. This is precisely why I got out of the market forever in very early 2008. Havent looked back.”
Let’s talk after a post-Romney victory.... You might miss the biggest jump since WWII. And I mean that!
Seems to me that event was what brought HFT to light in the first place.
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