Wednesday, February 08, 2012

the rise of the high frequency trading machine


Zero Hedge | Zero Hedge has not been focusing much on the topic of our broken equity markets recently because if by now, following over three years of coverage, someone is not aware just how fragmented, manipulated and largely broken the market truly is, they never will. Yet every now and then it worth reminding readers who may have stumbled on this blog recently, just how bad things are in graphic format. Our friends at Nanex, who are by far the best forensic analysts of everything that is busted with the US stock market, have completed a masterpiece analysis showing the churning (packet traffic) in the various fragmented US market venues, from the NYSE to the Nasdaq to BATS and so forth, on a daily basis beginning in January 2007 and continuing through today. While the "rise of the High Frequency Trading machine" over the past 5 years, following the adoption of Reg NMS, will hardly be a surprise to most, what is stunning is the first animated confirmation of the market terminally breaking on August 5, 2011, the day the US was downgraded, an observation that first was made right here on Zero Hedge. Which begs the question: what really happened in the stock market on August 5, 2011 when the US was downgraded to AA+, when everything literally broke, who is intervening constantly in the stock market, and why are they doing so via various HFT intermediary mechanisms?

Note the insanity that begins on August 5, 2011.

4 comments:

CNu said...

 What puzzles me is, why the effort to bail water and postpone what's coming?

John Kurman said...

http://www.hulu.com/watch/19878/the-simpsons-flying-pig

Dale Asberry said...

My very question since the whole TBTF fiasco ...

trade machine said...

I'm thinking that this strategy is quite easy and accessible to everyone, perhaps with this we can have an easy and faster transaction to what business we have.

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