Microwave Heats UP Market Speed. by Jacob Bunge Nov 23, 2012 p. C1.
[Excerpted] In a business where milliseconds matter, three of the largest exchange operators are looking to join the race to beam data to traders via ultrafast microwave links.
CME Group Inc. and Nasdaq OMX Group are exploring a joint venture that would relay price and other market information between New York and Chicago faster than existing underground fiber-optic cables, while NYSE Euronext is offering services to capitalize on demand for speedier links between London and Frankfurt.
....ARound the world 'there's a bit of an arms race between various vendors to secure ther ight frequencies and roof space,'....
The embrace of microwave radio technology comes as the role of speed and access to data in the markets is under increased scrutiny. The SEC in Sep fined NYSE Euronet $5 million for providng prices to some customers ahead of the broader market....[end excerpt]
Majia here: The arms race of high frequency trading allows proprietary traders to scalp other parties' transactions. This practice is not "market making" as the banksters would have you believe. Rather, it is essentially CHEATING:
Ex-Insider Calls High-Frequency Trading ‘Cheating’ Thursday, 20 Sep 2012 | http://www.cnbc.com/id/49103708/?Ex_Insider_Calls_High_Frequency_Trading_Cheating?__source=yahoo|instory|&par=yahoo
High-frequency trading — [Excerpted] particularly the practice of “queue-jumping” —amounts to little more than cheating, former Wall Street insider Haim Bodek said Thursday in a CNBC exclusive television interview.
“I
felt, I’m playing poker with a bunch of guys, and six months after I’m
losing over and over and over, they say, ‘We’re cheating. Didn’t you
know? Everyone knew.’ And my problem was after that, I thought that
somehow, with my firm, that because I knew how these practices work, I
could somehow trade around them. And I came to the conclusion that it is
actually an unbeatable system right now,” he said on “Fast Money.”
“I don’t think anybody can compete that’s outside of this particular practice, and that’s why it’s 50 to 70 percent of U.S. market because the diversity of our algorhithmic trading tradition have been annihilated by this particular practice,” he added.... [end excerpt]
see also http://www.cnbc.com/id/49102808/
PREVIOUS POSTS ON HIGH FREQUENCY TRADING
Oct 23, 2012
Majia
here: High frequency trading allows companies to engage in a variety of
fraudulent activities -- including quote stuff and naked short selling
-- thereby allowing companies to 'scalp' other traders' legitimate
trades.
Apr 09, 2012
Majia
here: High frequency trading allows companies to engage in a variety of
fraudulent activities -- including quote stuff and naked short selling
-- thereby allowing companies to 'scalp' other traders' legitimate
trades.
Aug 28, 2011
High
frequency trading (HFT) technology enables profits to be gleaned from
“movement” itself within markets by skimming the purchasing and selling
activities of other traders, especially large institutional investors
such as ...
Sep 15, 2012
Financial
Warfare Using High Frequency Trading, Quote Stuffing and Naked Short
Selling
http://majiasblog.blogspot.com/2011/08/financial-warfare-using-high-frequency.html
...
Oct 24, 2009
In
today's WSJ, Jason Zweig writes that "More than two-thirds of
stock-market volume comes from high-frequency traders, who can buy or
sell in less thant 400 microseconds, or nearly a thousand times faster
than you can ...
Apr 12, 2012
This
is a hidden and hefty tax that shifts vast wealth from the many to a
few speculators. Today's speculators use a variety of techniques enabled
by high frequency trading that allows "scalping" and outright fraud
(e.g. naked ...
Aug 11, 2012
HOWEVER,
a former Goldman Sachs computer programmer, Sergey Aleynikov, who
allegedly absconded with code for high frequency trading he had written,
is now being charged AGAIN with two felonies by the Manhattan ...
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