Nanex Research

Nanex ~ 22-Jun-2013 ~ Can You Spot The Reg NMS Violations?

How HFT Minted Money During the Financial Crisis

We'll give you a hint: fantaseconds. Fantaseconds, everywhere. This is how High Frequency Trading (HFT) practically minted money during the financial crisis. With no regulators in sight, HFT robbed investors and other traders blind. With very little effort, we plucked 100 charts to illustrate the absurdity that markets functioned well during the financial meltdown. Many of the short term oscillations shown in these charts were created by HFT algos to induce a lag and create latency arbitrage opportunities. We are confident there are hundreds of thousands of examples like these during the fall of 2008, and that many would show far more egregious behavior than presented below. And yet the regulators could not spot a single one. Even after spending millions on MIDAS.

Want to see more examples? How about 562 charts of QQQQ ?


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