Financial Transaction Tax

[overthehill]

HFT is fraud. Pure and simple. There are adequate fraud provisions in the criminal code to deal with it. It should never have been allowed in the first place.

That they a) allowed it and b) haven't banned it altogether by now tells you all you need to know.

Why can't we call "white collar crime" what it is?

Crime.

 

[Inside Shoulder]

HFT is fraud. Pure and simple.

Why is it fraud?

 

[Scarfman]

Fraud, eh? It's all good stuff, overthehill.

As for what they call "white collar crime," well, you should have another look at all three of the words. And not so much the first two.

 

[overthehill]

Why is it fraud?

Two aspects of HFT at least are fraud. Front running is fraud and wash trading is fraud.

 

[Antony]

As a programmer who works in high frequency trading in the UK, I'm against it (the tax)

Then again, maybe it's time for a change, and the middle east has been gunning to steal the finance business from Europe for a while.

If could learn Arabic, become a Muslim and look less like Andrew Mehrtens I would get into Islamic Finance immediately. What a fascinating, challenging license to print money.

 

[overthehill]

Fraud, eh? It's all good stuff, overthehill.

As for what they call "white collar crime," well, you should have another look at all three of the words. And not so much the first two.

OK but the differentiation in terminology tends to lessen the perception of its seriousness. That allows them to get away with a lot more than other criminals with far less serious consequences.

 

[Inside Shoulder]

Two aspects of HFT at least are fraud. Front running is fraud and wash trading is fraud.

Front running probably is fraud, as I understand it: but how much of this goes on?

 

[overthehill]

Front running probably is fraud, as I understand it: but how much of this goes on?

I don't know about Australian exchanges but in the US and UK, the vast majority of trades are HFT and the vast majority of bids are withdrawn/never complete.

So the big players' prop desks can book profits 100% of trading days. Equity prices stay way up on any rational basis for pricing despite very low trading volume. It's a complete fraud.

But without the commissions paid to the exchanges by the HFTers, most would be out of business. Imo that wouldn't be a bad thing. Privately owned exchanges are a recipe for this sort of fraud wave.

 

[Inside Shoulder]

overthehill - this only confirms my outsiders view that the share market is horse racing without the horses

 

[Mank]

I don't know about Australian exchanges but in the US and UK, the vast majority of trades are HFT and the vast majority of bids are withdrawn/never complete.

Algos trying to hit a certain price and withdrawing when it doesn't execute. Why are you saying this is front running?

So the big players' prop desks can book profits 100% of trading days. Equity prices stay way up on any rational basis for pricing despite very low trading volume. It's a complete fraud.

Not sure about the US, but many European banks don't have prop trading any more. You are suggesting that all HFT is based on fraud, which is not true.

 

[overthehill]

Not all, but I'd bet most. Either way, it gives some participants an unfair advantage over the majority of market participants and doesn't add anything positive to anything of value. It should never have been allowed.