Latency Arbitrage with Predatory Algorithm for Trading

Latency arbitrage is the practice of one party, perhaps a predatory HFT firm, exploiting a time disparity and earning profits with a computer algorithm for trading, when that trade is executed solely because of a latency advantage.  Latency arbitrage has raised many heated discussions among all market participants, the SEC and government law makers for many years, yet this unfair unequal access to US equity markets is still the main strategy of many predatory firms.  

Let’s take a look at what exactly latency arbitrage means, why it occurs, and what we can do about it.   (more…)

Top on Trader’s Wish List – Limit Payment for Order Flow

Historytraders looking at computer screens

After speaking with several experienced traders, one thing stands out as top of their wish list: limits on payments for order flow.  Payment for order flow (POF) is a widespread arrangement, and one that’s been around in US Markets for quite some time.  In fact, this practice dates back to the 1980’s with masters like the notorious Bernie Madoff leading the way.   This system is an arrangement where a third-party firm pays brokers to send orders to them rather than to the open market.   (more…)

Weighing In on Trade-At Rule

History

stocks trending upMany factors and opinions come into play when discussing the need for a Trade-at Rule, but most agree it warrants evaluating.   Practices such as Payment for Order Flow (POF) are causing Traders, Exchanges and Regulators to review the current market structure and consider implementing a Trade-at Rule, while traders are still fighting for market share.    (more…)

Trading Stocks From Home vs. Trading From the Office

traders looking at computer screensMost traders begin their career as an individual, discretionary Day Trader.   An individual learns from experience, and that couldn’t be more true for a trader.  Once a trader has some experience under their belt, they may consider trading stocks from home.  Certain circumstances could prompt this desire to work from home rather than your firm’s office; perhaps you are new to an area and want to work for a company located in another state, or maybe you are already settled into your dream home, and find yourself in transition searching for a new firm to call home but the one you want to work with is located miles away.  Many trading firms offer their traders the ability to trade from home, or from their office.  While there are many advantages to both, we’ll evaluate the pros and cons in both situations, the requirements for successfully trading remotely, and the benefits of working in the office with other experienced traders. (more…)