| | HFT Is a Gun Pointed at Your Portfolio
You're about to see a film about the dangers algos pose for the unprepared. For those that know how to use them, however, fast double-digit profit potential and a 75% trading win rate is possible. Here's how…
Professor Bierman here, with a story everyone needs to hear…
In the early 2010s, a group of investment banks pooled resources and spent $300 million (a lot of money way back… now) to lay a special transatlantic cable. | This cable would cut communication times between the global financial hubs of New York and London… by 5 milliseconds. | That 5-millisecond boost was worth more than a quarter of a billion dollars to these guys. | The $300 million cable story was one of the public's earliest introductions to the world of high-frequency trading, or HFT, an algo-driven scheme designed to flood market systems with up to millions of orders every second, virtually none of which are meant to ever be filled. | And they make hundreds of billions of dollars doing it. | "How is this even legal?" I can hear a lot of you ask. It's more than legal - the "watchdogs" at the SEC say high-frequency trading provides "valuable liquidity." To be clear, that's the same way a frenzied bull shark in your swimming pool will provide "excitement." | For those of us not trading millions of times every second, HFT poses some unique, very dangerous risks, both to the market we all trade in and to our individual portfolios. | In this special Man vs. Machines, I'm releasing the second half of my expose on HFT, how it works and how dangerous it can be. You can watch it right here - great weekend watch. | Talk to you soon, | Bierman |
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