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Tag Archives: hft

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 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;…

John Lothian Newsletter: NYSE Sees Danger Of Exchanges Becoming ‘Showrooms’ For Prices; HFT curbs may take Europe ‘back 7 years’; Hedge funds may be allowed direct access to China markets John Lothian Newsletter,Newsletter

NYSE’s Niederauer sees the danger of a exchanges becoming a place where traders browse for quotes before doing their actual trading off-exchange. The FIA EPTA in Europe warns that HFT regulation and slowdowns may move market progress back several years. Chinese regulators are considering allowing foreign hedge funds to directly trade in domestic companies and financial products. In the top box, John Lothian discusses the importance of reading what one is given; and you’ll also find a reminder, in case you missed yesterday’s special report, to come help us improve MarketsWiki next week.

John Lothian Newsletter: US Appeals Court Revives ISE Patent Case Against CBOE; CME said to be among bidders for London Metals Exchange; Hong Kong markets must adapt, SFC says John Lothian Newsletter,Newsletter

A US appeals court judge reviews the patent decision between ISE and CBOE, and decides to revive the 5+ year running disagreement. The LME says it has received several bid proposals for its purchase, and CME Group may be among the bidders. The Hong Kong exchange (coincidentally also bidding for LME) is being warned by the regional regulator that it’s vulnerable to sticky HFT, dark pool and other situations that are common in other parts of the world, and that it’s time to get moving to address those issues. In the top box, you’ll find a link to Doug Ashburn…

John Lothian Newsletter: Happy Flash Crash; Nasdaq to Launch New Stock-Options Trading Venue; Bids for the London Metal Exchange Due Monday John Lothian Newsletter,Newsletter

The flash crash was two years ago; high-frequency trading since then has bred high-frequency analysis over unsupervised algorithmic trading, but less consensus or operational changes. Nasdaq is going to launch a new options platform, too! Concern is growing that since the number of people trading options isn’t increasing exponentially, adding lots of new options venues will do little other than fragment the existing order pool. And if anyone else wants to bid for LME, today is the day to get them in.

John Lothian Newsletter: HFT slows down in US ahead of exchange action; Weighing SEC’s Crackdown on Fraud; Lenders Again Dealing Credit to Risky Clients John Lothian Newsletter,Newsletter

High frequency trading is on its way to being named “a little less frequency trading”, as activity slows down in the face of exchange rules against certain kinds of order activity. The SEC has passed the century mark in enforcement actions related to the financial crisis, but questions are still pending as to whether the agency has been effective enough. In the “This rock looks familiar” department, banks are once again urging high risk borrowers to take on more debt. And in today’s top box, Simon Rostron of Rostron Parry gets gussied up and bare-kneed in an appeal for kids.

Former SEC Chairman David Ruder Discusses the ‘Flash Crash’ & Dodd-Frank (Part 1 of 2) Interview,Regulation,Tech / HFT,Video

Northwestern Law School professor emeritus David Ruder talks to editor/producer Nicole V. Rohr about his experience as SEC chairman during Black Monday in 1987, and also about what stemmed from the subsequent flash crash in May 2010. Ruder was a part of the President’s Working Group on Financial Markets in 1988 and more recently worked on the Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues. He discusses findings and changes to rules surrounding circuit breakers, dark pools and naked access. View Part 2 here.