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HFT Rules: Rules for the Algo Highway Regulation,Tech / HFT,Video

HFT Rules: Rules for the Algo Highway

Customer confidence has been hit by a number of different events over the past several years and high frequency trading (HFT) problems have been among them. Ben Van Vliet, assistant professor of finance, Stuart School of Business, Illinois Institute of Technology has been looking the creation of a standard set of rules high frequency trading participants can use to ensure safer markets. Van Vliet has helped initiate the AT 9000 system, which would set standards for HFT design, backtesting, implementation and portfolio and risk management. Van Vliet says its important that the industry support such a project, rather than wait…

John Lothian Newsletter: NYSE Euronext, Russell Investments in Index Tie-Up; Direct Edge to seek Brazil bourse license in “weeks”; SEC’s Hired Gun on High-Frequency Trading Gets Permanent Role John Lothian Newsletter,Newsletter

Russell and NYSE Euronext team up to distribute index data, and they may extend that relationship in the future. Direct Edge says they’re intending to open a new exchange in Brazil. The SEC gives their HFT expert a real office chair in ongoing efforts to understand and regulate high-frequency trading’s marketplace effects.

HFT Rules: Three Part HFT Harmony Regulation,Tech / HFT,Video

HFT Rules: Three Part HFT Harmony

High-frequency trading (HFT) has been in the financial press a lot over the past several years. From the Flash Crash of 2010 to the collapse of Knight Capital in 2012, trading glitches and the negative impact of HFT on markets and investor confidence is well-documented. In this segment of the Restoring Customer Confidence series, Mayer Brown attorney Zachary Ziliak outlines the three sources that will address HFT and help restore customer confidence. Ziliak says regulatory bodies will likely continue to address HFT guidelines, exchanges are imposing new fees on HFT practices and AT 9000, standards system for HFT practices, will…

JLN Options: ISE Announces Mini Options Launch Date of March 18, 2013 Newsletter,Options

Lead Stories ISE Announces Mini Options Launch Date of March 18, 2013Press ReleaseThe International Securities Exchange (ISE) today became the first exchange to confirm a launch date of March 18, 2013 to commence trading in Mini Options. Since receiving Securities and Exchange Commission (SEC) approval for this innovative new product offering, ISE has been coordinating with its member firms to determine an appropriate date for launch readiness. Mini Options will represent a deliverable of 10 shares of an underlying security, whereas standard contracts represent a deliverable of 100 shares. ISE will initially list Mini Options on the following securities: AAPL,…

Harrell Smith of Portware on FX Market Structure Financials,Interview,Tech / HFT,Video

Harrell Smith

Harrell Smith is the head of product strategy for Portware, a software company specializing in trade execution systems for equities, futures, options and foreign exchange markets. He spoke with John Lothian News Editor-at-Large Doug Ashburn about several critical topics affecting FX, including the regulatory landscape, algorithmic and high-frequency trading, and transaction cost analysis.

John Lothian Newsletter: SEC Looks for the ‘Kill Switches’; CME Announces Launch of Chinese Steel Rebar Swap Futures; Exchanges See No Unfairness in Data Delivery Speeds John Lothian Newsletter,Newsletter

The SEC launches a broad investigation and overhaul of order placement systems and controls, seeking new ways to control and mitigate damage from high-speed orders.  Sort of “Finding Nemo: The Financial Episode”, perhaps. CME Group announces the planned launch date for the exchange’s new Chinese steel rebar swap futures contract.  Exchanges have carefully considered the various speeds and methods available for market participants, and have concluded that it’s really ok to charge more for better access.  In today’s First Read section, be sure to check out the JLN Metals box and the interview there with Michael Turek, senior director of…

John Lothian Newsletter: CME Said Planning Europe Exchange to Compete With Eurex, Liffe; Deutsche Bank investigated in U.S. over Iran; Canada’s ATS Battle Heats Up With New Entrant John Lothian Newsletter,Newsletter

CME Group files for permission to create a new exchange in Europe.  Deutsche Bank becomes the latest bank investigated over US-illegal, Iran-related transactions.  Chi-X Canada plans to introduce a new alternative trading system, bringing the total in that country to five.

John Lothian Newsletter: China moves to algorithmic trading; Tech-caused trading halts on Tokyo and Spanish exchanges; Warsaw Exchange targets derivatives growth John Lothian Newsletter,Newsletter

A Chinese brokerage company has decided to begin using an automated trading platform supplied by US companies, demonstrating the increasing interest in fast, automated trading systems in China.  Speaking of electronic trading, exchanges in Tokyo and Spain were both offline yesterday for several hours as their systems experienced malfunctions.  Warsaw Exchange takes stock and weighs its options for the future, and looks for growth in derivative products.  In First Read today, you’ll find MarketsWiki.tv interviews with Ben Van Vliet of IIT talking about high-speed trading; Jim Downs of Connamara Systems talking about CFTC Rule 1.73 and its impact on the…

TAC 2.0 Commentary,Regulation,Tech / HFT

John Lothian

Yesterday was my first meeting in Washington, DC as a member of the CFTC’s Technology Advisory Committee, or TAC 2.0 as it is called. The meeting featured reports from working committees on aspects of high frequency trading, or HFT, as well as presentations about SEFs. The first task from Working Group #1 was to define what HFT is. The working or provisional definition of HFT from Working Group number #1 was: High frequency trading is a form of automated trading that employs: (a) algorithms for decision making, order initiation, generation, routing, or execution, for each individual transaction without human direction;…