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9 Dec 2016 (AFR) – Citi trading algorithm involved in sterling October ‘flashcrash’

(9 December 2016, AFR, p29, by Katie Martin and Caroline Binham) ‘The UK investigation into October’s “flash crash” in sterling has focused heavily on the Japanese trading operations of Citigroup, which fired off repeated sell orders that exacerbated the pound’s fall, according to bankers and officials involved in the inquiry. Citi’s traders are not believed to have … Continue reading

7 Sept 2015 (AFR) – SMARTS nabs dodgy traders – CMCRC tech results in $16m fine for British high-frequency traders

[COMMENT: Hidden in this story is a little detail about some of the tricks that soem day traders deploy in order to make a profit, at the expense of the retail investors.] (7 September 2015, AFR, p7, by Yolanda Redrup) ‘An invention from an Australian technology business has been used to crack a case about … Continue reading

1 May 2015 (AFR) – Time to ban high frequency trading

[COMMENT: This letter to the editor will certainly ring true with the many retail investors and traders who are trying so hard to invest/trade in the markets wisely, and who are interrupted by the HFT gorillas.] (1 May 2015, AFR, Opinions – Letters to Editor, p35, David White, International Centre for Financial Services, University of … Continue reading

24 Apr 2015 (AFR) – Flash maths and the mystery trader – armed with algorithms rewrites flash crash

[COMMENT: Here is a very interesting insight into what allegedly happened during the infamous ‘flash crash’ on the US market in May 2010.] (24 April 2015, AFR, p14, by Silla Brush, Tom Schoenberg and Suzi Ring) ‘From a modest stucco house in suburban west London, where jetliners roar overhead on their approach to Heathrow Airport, … Continue reading

23 Apr 2015 (AFR) – UK speed trader arrested over 2010 ‘flash crash’

(23 April 2015, AFR, p16, by Douwe Miedema and Sarah Lynch) ‘Washington A high-frequency trader was arrested in London over his alleged role in the May 2010 “flash crash” that briefly wiped out nearly $US1 trillion in market value, the first time authorities have blamed manipulation for the turbulence.’ Read more at AFr.com (might need … Continue reading

9 Apr 2015 (AFR) – Flash boys fingered in dollar mystery? – ASIC looks at RBA over currency trading anomaly

(9 April 2015, AFR, p27, by Vesna Poljak  , Jonathan Shapiro , Sally Rose ) ‘Unusual trading in the Australian dollar seconds ahead of each of the past three Reserve Bank of Australia policy outcomes could be a result of insider leaks, automated algorithmic trading during a market lull, or shrewd guesses. The Australian Securities … Continue reading

7 Apr 2015 (TheAge) – Flash boys go faster, jumping queue; Algorithmic traders invade $42 trillion bond futures market

(7 April 2015, The Age, BusinessDay, p21, Jonathan Shapiro, Shaun Drummond) ‘Secretive “flash boy” operators are using high-frequency and algorithmic trading technology to “jump the queue” in Australia’s $42 trillion interest rate futures market, squeezing out local traders who can’t keep up with their computing speed and power.’ Read more at TheAge.com.au

24 Feb 2015 (TheAustn) – Regulators bid to stop spoofing

[COMMENT: Now this is an eye opener – an insight into some of the alleged under-handed dealings by some of those big-time traders.] (24 Feb 2015, The Australian, p25, Bradley Hope) ‘ONE June morning in 2012, a college dropout whom securities traders call “the Russian” logged on to his computer and began trading Brent crude … Continue reading

4 Jul 2014 (AFR) – Local funds ignore disclosures about dark pools

(4 July 2014, AFR, p17, Jonathan Shapiro) How high-frequency trading chisels genuine investors ‘Australian fund managers are ignoring the disclosures of their brokers that are feeding their orders to “dark pools” to be skimmed by high-frequency traders (HFTs). The issue of client orders was highlighted last week when the New York Attorney General filed a … Continue reading

4 Jul 2014 (AFR) – Trading at full speed – How high-frequency (HFT) trading chisels genuine investors

[COMMENT: A great article by Pierpont on the rorts that are alive within the financial system. This is a great eye-opener.] (4 July 2014, AFR, p23, Pierpont) ‘In this high-tech world, the haves pay in nanoseconds while the have-nots have no idea.’ ‘When chaps at the Croesus Club first began chatting about high-frequency trading and … Continue reading

30 Jun 2014 (AFR) – Barclays charged over client fraud

(30 June 2014, AFR, p32, John Kehoe) ‘The shocking revelations about the blatant dishonesty of Barclays bank to clients about the existence of so-called “predatory” high-speed traders in its dark pool exchange is a lesson in why transparent financial markets are essential.’ ‘The New York Attorney-General Eric Schneiderman,last week filed civil charges against the bank, alleging systematic fraud … Continue reading

30 Jun 2014 (TheAge, SMH) – Clients are dark on Barclays

(30 June 2014, The Age, BusinessDay, p30, William Alden) ‘Several large brokerage houses last week stopped sending orders to the private stock trading system run by Barclays, concerned at a lawsuit claiming that the bank committed fraud.’ ‘The brokerage houses – including Deutsche Bank, the Royal Bank of Canada, Sanford Bernstein and Voya Financial – … Continue reading

20 Mar 2014 (AFR) – NY takes on ‘potentially illegal’ high frequency trading

[COMMENT: This news this week will be sweet music to the ears of many retail investors and traders who have been worried for a while now that the all-powerful HFT traders are ripping them off and ought to be brought to account. Perhaps some restrictions on HFT will be forthcoming?] (20 March 2014, AFR, p35, … Continue reading

20 Mar 2014 (AFR) – High-speed trading faces New York probe into fairness

(20 March 2014, AFR, p20, Keri Geiger and Sam Mamudi) ‘New York’s top law enforcer has opened a broad investigation into whether US stock exchanges and alternative venues provide high-frequency traders with improper advantages. Attorney-General Eric Schneiderman said he’s examining the sale of products and services that offer faster access to data and richer information … Continue reading

2 Oct 2013 (TheAge) – Clients owed millions after derivatives broker GTL Tradeup collapses

(2 Oct 2013, The Age, BusinessDay, p22, Gareth Hutchens) ‘GTL Tradeup, a Sydney derivatives broker whose director has been linked to a multimillion-dollar Italian fraud case, has collapsed, owing clients more than $3 million. About 300 clients in Australia, New Zealand and China are believed to be affected. The clients were informed via email last … Continue reading

21 Aug 2013 (AFR) – ASIC targets hybrid market disclosure

(21 August 2013, AFR, p3, Jonathan Shapiro and Patrick Commins) WHAT ARE “Hybrids”? – See the ASIC definition, and see TheBull. ‘The Australian Securities and Investment Commission has vowed to lift disclosure in the $18 billion hybrid market to protect investors who are mainly self-managed super funds. The corporate watchdog’s investigation vowed to stamp out “misleading … Continue reading

9 Aug 2013 (TheAge) – Broker cops fine over high-speed trades

(9 August 2013, The Age, BusinessDay, p22, Gareth Hutchens) ‘A high-frequency trader was allowed to make hundreds of potentially highly suspect trades for three weeks in late 2010, and the broker that facilitated those trades has now been fined $130,000. But the corporate regulator will not say who the high-frequency trader was, if it is … Continue reading

31 July 2013 (TheAge) – Dark pools – Size of equity trades fall

(31 July 2013, The Age, BusinessDay, p27, Gareth Hutchens) ‘Algorithmic trading and dark pools continue to change the face of Australia’s equity market, with the average size of trades falling to just $4900, down from $11,500 less than three years ago. The Australian Securities and Investments Commission has released a new report on trading activity … Continue reading

13 June 2013 (AFR) – Ultra-fast traders put market at risk: Mackay

(13 June 2013, AFR, p27, Stephen Shore) ‘The Australian sharemarket is at risk of flash crash event caused by ultra-fast traders removing risk checks to increase the speed of their algorithms, a high-frequency trading expert has warned. High-frequency trading (HFT) specialist Fil Mackay works with fund managers and institutional investors to help them understand and … Continue reading

4 June 2013 (AFR) – Super funds claim HFT costs investors $1.5bn a year

(4 June 2013, AFR, p3, Patrick Durkin) ‘Industry superannuation funds estimate super-fast computer-driven ­trading is costing ordinary investors $1.5 billion a year. The Industry Super Network, which made the estimate, wants structural changes to the operation of the sharemarket to better protect other investors from high-frequency trading.’ ‘Using complex mathematical ­algorithms, high-frequency traders analyse market information … Continue reading

4 June 2013 (TheAge) – High-speed trading’s heavy cost

(4 June 2013, The Age, BusinessDay, p21, Gareth Hutchens) ‘High-speed traders are costing long-term investors and super funds as much as $1.9 billion a year in lost trading opportunities, figures to be revealed on Tuesday show.’ ‘The Industry Super Network, which represents the nation’s industry super funds, will release a report showing high-speed traders do … Continue reading

31 May 2013 (The Age) – No brakes on high-speed trades: ASIC

(31 May 2013, The ge, BusinessDay, p25, Gareth Hutchens) ‘The corporate regulator says it will not put the brakes on high-speed traders by forcing brokers to hold small trades for a ”minimum resting time”. The chairman of the Australian Securities and Investments Commission, Greg Medcraft, said the proportion of super-small trades on the Australian Securities … Continue reading

29 May 2013 (AFR) – Banks winning fight against high-frequency traders

(29 May 2013, AFR, p13, Stephen Shore) ‘High-frequency traders now account for less than half the trades on American exchanges, down from an estimated 70 per cent at its peak in 2009, because algorithms developed by investment banks have made it harder for super-fast traders to make money, the global head of Citigroup’s algorithmic products, Young … Continue reading

26 Feb 2013 (AFR) – Stevens queries rise of high frequency trading

(26 Feb 2013, AFR, p10, Jacob Greber) ‘Reserve Bank governor Glenn Stevens – who shares responsibility for financial stability – has questioned the benefit to society of high frequency computer trading (HFT).’ ‘Mr Stevens said critics were right to worry about instantaneous trading systems amid concern they may be adding to stockmarket instability and enabling … Continue reading

19 Dec 2012 (AFR) – Call for tax to rein in high-speed trading

(19 Dec 2012, AFR, p17, George Liondis) ‘Fund managers have called for a new tax to clamp down on high-frequency traders and prevent “predatory” behaviour on the sharemarket. The Financial Services Council, which represents the country’s investment managers, said the measure was needed to prevent Australia going down the path of the United States, where … Continue reading

24 Oct 2012 (AFR) – UBS behind mystery shares spike

(24 Oct 2012, AFR, p5, Mercedes Ruehl) ‘UBS has emerged as the broker behind mystery spikes in several major blue-chip stocks when the market opened on Thursday, putting its dealing in direct conflict with ASX guidance to ensure trading is fair and orderly.’ ‘The investment bank is understood to have slashed a large sell order … Continue reading

20 Oct 2012 (AFR) – Black Tuesday: lessons from the crash

[COMMENT: This is a lengthy but great history record of the events around the time of the market crash of 1987. It is rather long with just a few key snippets noted here. You really must read the full story at AFR.com.] (20 Oct 2012, AFR, p46, Trevor Sykes) ‘This weekend marks the 25th anniversary … Continue reading

20 Oct 2012 (AFR) – Decipher the fast-trade static

(20 Oct 2012, AFR, John Wasiliev) ‘A battle is taking place in the Australian sharemarket between investors and traders that all investors should understand, given the potential for them to be caught up in it. The tussle is between mainly larger investors like fund managers and a breed of speculators who engage in what is … Continue reading

19 Oct 2012 (The Age) – Unusual trades spark fears of market manipulation

(19 Oct 2012, The Age, BusinessDay, Mark Hawthorne, Gareth Hutchens, Georgia Wilkins) ‘THE integrity of trading on the Australian Securities Exchange was called into question last night after a series of unusual transactions raised the spectre of market manipulation.’ ‘Shares in more than eight blue-chip stocks – including ANZ Bank, Commonwealth Bank, Brambles, AGL, Bank … Continue reading

18 Oct 2012 (AFR and New York Times) – High-speed trader runs out of puff

(18 Oct 2012, AFR, p21, By NATHANIEL POPPER and New York Times) High-Speed Trading Executives Shut Firm ‘A high-frequency trading firm founded less than two years ago by former Citigroup executives is ending operations as the industry confronts a slowdown.’ ‘The firm, Eladian Partners, was started in early 2011 by two pioneers in high-speed trading, Steve … Continue reading