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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?

2 comments:

  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.
    http://market-ticker.org/akcs-www?post=212496

    ReplyDelete
  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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