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
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