The post was written by Minyanville Contributor James AndersonThe fastest possible computers are located adjacent to the computers that receive orders at the stock exchanges, and I when I say adjacent, it's not the building next door, it's literally feet away. This world operates in milliseconds, and even the speed of light in a fiberoptic cable is not fast enough for anything other than colocation.
I don't want to go into the argument for and against HFT, but I want to show you what it looks like. The attached table and chart are the New York Stock Exchange Tick Indicator. Tick is defined in the following manner. If a stock trades up from its last trade, that is a positive tick. Down, it would be a negative tick. The Tick Indicator simply sums up all the positive and negative ticks on all the NYSE stocks and reports that number every 10 seconds. (At least my software reports it every 10 seconds.)
The table includes all reported ticks from 10:00 to 10:06 this morning. The column on the right is the difference from the tick reported 10 seconds earlier. The chart is the difference column. As you can see in this 7 minute period, the tick swings wildly back and forth from a high of 580 to a low of -318. Remember, those are 10 second swings.
Folks, It's not people doing this. This is HFT at work. Is it just noise? Does it really matter? Obviously it matters to the people doing it because they are extracting profits from somebody. Who that somebody is, I am not sure, but with the very sour attitude toward Wall Street on Main Street, I can't imagine that Congress will not want to investigate. If you haven't heard of HFT before, you will in the future.
Click here to enlarge.
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Reader Comments (Page 1 of 1)
8-03-2009 @ 3:00PM
Keith Baravarian said...
You people at CNBC are sick in the head. You're network is manipulating the truth and telling lies to the entire Nation. "The recession is over"? S&P 1,000? "We sold a few cars and Jobless claims are trailing off, the recession is over." You are just a screwed up as Walt Disney's old prime time rascist cartoons.
Jobless claims have NOT peaked and last months unemployment number heading to 9.5% from 9.4% was an impossible event. There were over 500k people laid off again last month. Impossible, to have a .01% increase only, do the math you sick puppies. Then you said we sold a few cars to people with good credit. What's your point? 98% of this country is BROKE. So spending money they don't have is alright with you dopes because of the $4,500 rebate? What a bunch of chumps you are. Suckering the average investor in to a worthless market. We will see 11% unemployment with in the next 6-12 months. CLAIMS WILL CONTINUE TO RISE FOR THAT LONG, YES THEY WILL MELISSA FRANCIS. You must know, after all, you went to Harvard. Funny how you're all so smart, but we're stil in a depression.
You're all so damn happy until the negative news comes out and then you change tone on the spot. It makes me sick. I am dedicating $10,000 to "PUT" GE and other affiliates of your disguting network.
The stock market and economics are common sense. We have been laying off over 600,000 a month since September of last year. We have laid off over 6,200,000 as your network says. That affects about 25,000,000 in total. The green jobs are YEARS AWAY, we can't make them tomorrow. We don't need to hire workers to build cars either, no one will be buying one when the clunker program that my taxes are paying for. If you build up inventories again that is just what you are going to get, A BUILD IN INVENTORIES.
How can we obtain 3.5% to 4% growth in the third and fourth quarter of this year? I'm pretty sure Liesman already has an IPhone and doesn't need a second. Who the heck is going to be shopping and buying products? People are going to spend money that they don't have on products they already own? Your network is messed up and crooked. People are taking savings to buy a car now... they can't pay a mortgage, but you want them to buy a new car. I'm pretty sure LIPA is down 10% on revenue because of unpaid bills. Credit Cards payments are defaulting and Prime realestate is ata higher default rate then subprime. Get you head out of your behind. Have a heart and tell the truth, you deserve to be tortured in hell for what you are causing people to do. Speding money they dont have on goods they do not need. BUY A NEW I-PHONE, update technology and buy a new computer and even get a new car. Then when it comes time to pay their credit card and mortgage, they're out of luck and your tone will change again. The depression is not over, the recession is. I am going to send the last few e-mails i wrote over the last year to newspapers, journalists, the beloved white house and multiple networks that dont care yet, but will after the fact.
The consumer is responsible for 70% of the spending in this economy. Don't you know that 98% of the consumer is broke. BROKE!!! We worry about where lunch money and a mortgage payment will come from unlike Mr. Kudlow who has never known this problem.
ROUBINI is correct. THe recession will not end until the end of "09, beginning of "10. We will have 11%+ unemployment. HELLO, Verizon laif odd 8,000 people last week. I don't care if inventory is low, keep it low. NO ONE is going to shop in the second half of this year.
You people on the network are out of your minds. Have a conscience and a heart. Do you realize what you are doing to the consumer and average american? Stocks are going to crash, housing is going to take another leg down, interest rates are going to rise. You all said unemployment will not go above 8%, then it was 9% and now 10%. You change your estimate every few weeks. You're making things worse than they would have been.
Go to hell.