This Video Of One Half-Second Of High Frequency Trading Is Insane, Terrifying

[Serpo]

You have no idea just how bonkers high-frequency trading is making the stock market until you actually see it in action.
A terrifying new video by the research firm Nanex offers just such an opportunity: It shows one half-second of trading in just one stock, boring old Johnson & Johnson, on May 2. The video slows down the trades so that the milliseconds — thousandths of a second — tick slowly by, and so that human eyes can comprehend what’s happening.

What you see is trading gone haywire, hopelessly beyond the control of any regulators that might want to make sure all of these trades are legitimate. This flood of trading confuses even other machines, creating mismatches in orders that high-speed traders can exploit, millisecond by millisecond.
"These guys are not stealing dollars, they’re stealing pennies," says Nanex founder Eric Hunsader, who presented the video at a recent Wired conference. "It’s like paper cuts instead of first-degree murder."
Nanex is the same firm that produced a viral animated GIF last year showing the rise of high-frequency trading robots over the years. This video offers the first clear look at what those robots are doing every day, all day, now that they control more than half of all market volume.
More… (http://www.huffingtonpost.com/mobileweb/2013/05/09/video-half-second-high-frequency-trading_n_3245999.html)<i>
http://www.youtube.comhttp://www.youtube.com/watch?feature=player_embedded&v=rB5jJuMP84E/watch?feature=player_embedded&amp;v=rB5jJuMP84E
http://www.youtube.com/watch?feature=player_embedded&amp;v=rB5jJuMP84E

[palani]

http://i.imgur.com/DxWer.gif

[Twisted Titan]

Being the owner of Three Mercury Dimes has NEVER looked more good then it does night now.

[Ponce]

That's better than the game of battleship......as fast as they earn money is the same way that they can loose it.

V

[Norweger]

Woho fireworks!

[gunDriller]

how can we impede, in a nice way that doesn't invite attention from the DHS/FBI/SEC, this scam ?

seems like anybody who buys or sells stocks creates an opportunity for the HFT scammers.

even if you go to the extent of getting the stock certificate instead of a print-out, when you buy or sell, the HFT scammers can still extract their tax.

i smell parasites & bagels.

[palani]

how can we impede, in a nice way that doesn't invite attention from the DHS/FBI/SEC, this scam ?

You buy your ticket to the show when you purchase a single stock or bond. Multiple stocks and bonds buys you multiple seats. Negotiable instruments like FRNs will get you in the door just as fast. Asking for a benefit (3 hots and a cot) will be satisfied in the graybar hotel.

[gunDriller]

interesting, yes.

but - insane & terrifying ?

maybe - when we consider that these tools are in the hands of mostly very dishonest people.

OK, terrifying, yes.

but - insane ?

[Horn]

Nanex ~ 26-Mar-2013 ~ Flash Crash Mystery SolvedBelow are portions of a comment letter (http://www.sec.gov/comments/s7-02-10/s70210-107.htm) submitted by R.T. Leuchtkafer to the SEC on April 16, 2010, just 3 weeks before the flash crash. The second paragraph in the excerpt below, unknowingly describes exactly how the flash crash was started. The letter goes on to alert the SEC on the dangers of High Frequency Trading (HFT), phantom liquidity and other concerns.
http://www.nanex.net/aqck2/4150.html