NEW YORK — Fears that high-speed traders have been rigging the U.S. stock market went mainstream last week thanks to allegations in a book by financial author Michael Lewis, but there may be a more serious threat to investors: the increasing amount of trading that happens outside of exchanges.

Canadian says ‘moral compass’ led him to solve unfair gaming of stock markets by high-frequency traders

The former RBC trader is being heralded as the hero in a new book by Michael Lewis which looks at the controversial high-frequency trading industry. Read on

Some former regulators and academics say so much trading is now happening away from exchanges that publicly quoted prices for stocks on exchanges may no longer properly reflect where the market is. And this problem could cost investors far more money than any shenanigans related to high frequency trading.

When the average investor, or even a big portfolio manager, tries to buy or sell shares now, the trade is often matched up with another order by a dealer in a so-called “dark pool,” or another alternative to exchanges.

[ Read Whole Article ]

Published: 07 April 2014
Written by Editor

By: Mark Cuban - Blog Maverick

Posted on

First, let me say what you read here is going to be wrong in several ways.  HFT covers such a wide path of trading that different parties participate or are impacted in different ways. I wanted to put this out there as a starting point . Hopefully the comments will help further educate us all

1.  Electronic trading is part of HFT, but not all electronic trading is high frequency trading.

Trading equities and other financial instruments has been around for a long time.  it is Electronic Trading that has lead to far smaller spreads and lower actual trading costs from your broker.  Very often HFT companies take credit for reducing spreads. They did not. Electronic trading did.

We all trade electronically now. It’s no big deal

[ Read The Whole Blog Post and Everyone's Comments ]

Published: 05 April 2014
Written by Editor

MORNING NOTES
Q1 2014 Economic and Energy Metals Review
The Underappreciated Significance of Food Security and Fertilizers

In accordance with the rollout of our new journal offering next week, and our goal of increasing your “value added,” we will begin publishing a quarterly review of the Discovery space. Specifically, today we will analyze the overall macroeconomic picture and how it has affected select Energy Metals. We'll highlight the key themes which have driven many of the companies involved in exploration, development, and production to double digit returns YTD.

www.discoveryinvesting.com

 - [ Discovery Investing Web Site ]

alt

Published: 02 April 2014
Written by Editor
Research  

The Traders Podcast - Episode 242

It has been exactly 132 episodes since we last had a TraderRadio Flashback! For those who don’t know, TraderRadio.net (circa 2008 – 2009) was the precursor to The Traders Podcast. We sometimes enjoy looking back at the concerns of the day five years ago and comparing how they relate to our present trading. So, in this recording you’ll hear your host, Rob Booker, chatting with his old friends Corbin Layton and Joshua Hauck (the Ohio River swimmer) in an episode recorded on June 15, 2009, titled “Calamity, Collapse and Trading Redemption.” Rob and the boys talk about the transformation that occurs within a trader after experiencing a margin call (or some other humbling experience). And they also spend some time talking about some news items pertaining to the summer of 2009, such as the Eurozone economy, as well as the dollar bear trend and more. Thanks for listening!

[ Listen to the Podcast ]

Published: 02 April 2014
Written by Editor
Forex   Research   Podcast  

By Doug Short

March 31, 2014

Note from dshort: The NYSE has released new data for margin debt, now available through February. I've updated the charts in this commentary to include the latest numbers.

The New York Stock Exchange publishes end-of-month data for margin debt on the NYXdata website, where we can also find historical data back to 1959. Let's examine the numbers and study the relationship between margin debt and the market, using the S&P 500 as the surrogate for the latter.

The first chart shows the two series in real terms — adjusted for inflation to today's dollar using the Consumer Price Index as the deflator. I picked 1995 as an arbitrary start date. We were well into the Boomer Bull Market that began in 1982 and approaching the start of the Tech Bubble that shaped investor sentiment during the second half of the decade. The astonishing surge in leverage in late 1999 peaked in March 2000, the same month that the S&P 500 hit its all-time daily high, although the highest monthly close for that year was five months later in August. A similar surge began in 2006, peaking in July 2007, three months before the market peak.

[ See the Charts and Read The Whole Article ]

Published: 31 March 2014
Written by Editor
Research  
  1. Flash Boys: Former RBC trader hero of Michael Lewis’s new book on how U.S. stock markets are rigged

Subcategories

Institutions

Services