Tuesday, October 9, 2012

Is This Something To Be Worried About?

A single mysterious computer program that placed orders — and then subsequently canceled them — made up 4 percent of all quote traffic in the U.S. stock market last week, according to the top tracker of high-frequency trading activity. The motive of the algorithm is still unclear.
The program placed orders in 25-millisecond bursts involving about 500 stocks, according to Nanex, a market data firm. The algorithm never executed a single trade, and it abruptly ended at about 10:30 a.m. Friday. 

This is not my area of expertise so I really don't understand all the nuances of the stock market. I really don't trust what goes on with the financial industry. This story though is quite eye opening.
Is is insiders? Is it outsiders? Was it a test?  

I do believe the market is being manipulated for sure. There is no way it can be so strong with all the news that I read and hear. I know that the returns for any investment at the banking level is basically zero so people are still trying to invest to gain some return on their money. I just don't trust any of it at all.

Maybe one of my smarter readers can weigh in with a more intelligent answer or thought on this?


  1. Yes you should be worried. High Frequency Trading makes a mockery of the true purpose of the market. This guy is a good read to understand economic news. Here is his take on the HFT incident you mentioned.

  2. Considering the illegality of what this rogue program (see the Market Ticker link Daddio posted) did I see this as a dry run for the kind of thing that Iran or China or even the US government might use to trigger a massive sell-off.


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