First and to the point, from Irene:
On the other extreme are employers in the financial services industry. Just open the “Jobs” page in “Money and Investment” section in The Wall Street Journal, and all you will find are job postings seeking talent with high-frequency trading experience for high-frequency trading roles. The advertising employers are the whitest shoe investment banks like Morgan Stanley. These careful firms invest resources only into something they deem worthwhile and legitimate. The extent of their hiring (the only hiring advertised in The Wall Street Journal) implies that the industry is enormously profitable and here to stay.
Yes, JPM only creates things worthwhile and legitimate, like large, unchecked trades originating out of the rehypothecated cluster-fuck that is London. Now, pull these debates I posted and watch them if you have not, then please come back.
To the complete ding-dong this sounds great. Except if you actually LOOK at the ads you will see no financial service experience is required, only math skills and coding skills. For those who actually understand this complex web of lies that the financial services industry has strung up, you can get some nice P/L added onto your contract. The increase in jobs means nothing. HFT is drawing otherwise brilliant physicists and mathematicians away from NASA/DARPA style organizations and using them to shave a few pennies off a stock they discovered inside of 25 milliseconds – a lot of good that did for BATS.
Blowing smoke out of your mouth gets you no where, like pot smokers. Apparently though when you blow it our your ass you can get a platform to make sure the stink goes as far as possible.
So, how can Mr. Cuban and Morgan Stanley have such divergent views of the high-frequency world? For one, Mr. Cuban has likely fallen prey to some unscrupulous uncompetitive financial services providers making a scapegoat out of high-frequency traders. Opponents of high-frequency traders identify a range of purported HFT strategies that are supposedly evidence of how HFT destroys the markets.
Sadly Irene, Mr. Cuban hasn’t fallen for anyone’s bullshit. The dude is brilliant. HFT isn’t a scapegoat when they do:
- Something like this.
- Rape Preferred shares of JPM (the very bank Irene highlighted, Morgan).
- Don’t Create Tight Spreads.
And mind you, she adds in a little promotion to her upcoming HFT course, a little tacky Irene, actually real tacky. Anyways, the spread scalping you speak of is possible and performed on a regular basis. It’s not hard to do when the exchange is feeding you a better informed data feed for the right price. You said on CNBC, “Front-running is illegal, and respectable people don’t do it.” That could, possibly, at some given point be true. However, murder is illegal and look what happened at Columbine and Aurora.
In closing, 9 out of 10 things you hear about HFT from its PR machine are wrong. Hey Irene, here’s a collection of information that may help you. Feel free to post your own data for the public to reference at its own pace and on its own time. Stop misleading unsuspecting investors, the little guys, the people who save you from yourself. If you care to respond, email me and I will debate you.
NANEX Treasure Chest: http://www.nanex.net/aqck/aqckIndex.html
As a hat-tip to our underground, aliased, and frustrated world of information seekers, enjoy this video from Fight Club: