Aug

8

Paolo Pezzutti suggests:

I think this article may be interesting to those into markets microstructure:

Goldman, State Street Face Antitrust Claims Over Currenex

Goldman Sachs & Co. and State Street Bank & Trust Co. were hit with federal antitrust claims in Manhattan over an alleged scheme to rig foreign currency transactions through Currenex Inc., a State Street affiliate that operates a leading exchange platform.

The proposed class action accuses Currenex of fraudulently telling traders its software relied on the industry-standard “first in, first out” system for matching “bids” and “asks,” when in fact it gave State Street and Goldman the ability to “jump in line” and cancel transactions at the last second.

A reader reacts:

Omg that's hilarious…GS traders would benefit if that suit became case law. However I'd need a good lawyer to tell us about law.

The joke is HFT must have the ability to cancel and front the que.

I'm very good at visualizing all of this as "The Watcher" was a program we bought circa 1996 and that was my career as a "day trader" 96 to Feb 2002 when Vic bailed me out the first time of 4 times. 

The NASD was computer Market making system.

The nasd sec said mm must be on both bid and offer electronic and be if= fx % away from inside bid ask spread. By 2002 the nasd worked much better than nyse or a pit.

My first button was a 20% price riser. We called it the monster buy button. 

Bid 995 ask 1000 my buy would be 1200! I'd take offer go straight to que.

This worked for 2 months.

I got an instinet machine and was so arrogant they called 1000 share does orders dumb pikers and they didn't care. A year later they tried to ban us.

Get the joke trading is like all racing you invent an edge and wait for everyone to copy or steal it. Or you lose all the times as those with unlimited funds. Or friends in DC have the inside starting position the fastest car best engineering and if you drive for them and do not win constantly I'd try a new sport like catfishing.

A reader comments:

I am of no help with any question of securities law.  The farthest I ever got in the test-taking you all have endured was getting the license for being an investment adviser, and after a very short time (I think it was a year and a half) I realized that I had put my head in the noose of a second bureaucracy whose mission statement was "enjoy playing gotcha with the small mammals and be ultra nice to all reptiles large enough to be able to hire you for a 'private sector' job with porn benefits."


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