dagblog - Comments for "Everybody Knows The Dice Are Loaded..."

C'mon MM. Spreads get thin

Qnonymous — Fri, 04 Apr 2014 04:21:30 +0000

In reply to Everybody Knows The Dice Are Loaded...

C'mon MM.

Spreads get thin because of electronics... which basically means these guys, like so many of us, have one less way to make money... and so, they step in front of trades and rip us all off, serving absolutely NO useful function?

Come on. This is thievery, plain, simple.

And there's lots more where it came from. We all know this. There is so astonishingly much insider work done that it almost doesn't bear repeating.

And all of these guys, even with 2007-08-09 in hand, avoided prison.

Let's at least make sure the boot gets well and truly put into the groin of clowns like these HFT's, so we can at least be rid of them.

It's the bare minimum. And has frack all to do with decimalization.

What error? I would like to

EmmaZahn — Tue, 01 Apr 2014 19:05:16 +0000

In reply to Forgive my errors, I started

What error?

I would like to add that there were a couple of other aspects of order entry in the past that made it harder to take advantage of a mistake like you describe.

Orders were sent to either an inhouse trading desk or to that house's floor broker at one of the exchanges where it was likely to be caught but if not it could be more easily reversed because the traders on both the buy and sell sides had to keep working together, often face-to-face, so anyone taking unfair advantage would have to reckon with payback sooner or later. That may well have changed now that trades are more computer-to-computer.

Forgive my errors, I started

Michael Maiello — Tue, 01 Apr 2014 18:49:47 +0000

In reply to Like VA, I do not see

Forgive my errors, I started covering this stuff just as everything was decimalized...

Like VA, I do not see

EmmaZahn — Tue, 01 Apr 2014 18:42:21 +0000

In reply to Everybody Knows The Dice Are Loaded...

Like VA, I do not see decimalization as the problem here. More likely that was itself a result of individual traders and stockbrokers beginning to enter their own orders as computer technology evolved so they do not have to cope with the traditional fractions or base 8.

Old lady talking here: back in the day when stocks were traded in bits aka eighths and its multiples and divisors -- never in thirds -- buy and sell orders were entered by specific clerks in specific formats. Crucial information was always entered twice to reduce the likelihood of errors but it never eliminated them entirely. Yes, twice typing 2-1/2 instead of 42-1/2 was just as possible as 2.50 instead of 42.50.

I enjoy reading Michael Lewis. He is a great writer who captures the atmosphere of the industry I am most familiar with very well. That said, he has been out of the arena longer than I have so at best his current work is based on second-hand information about the technology involved. But the people involved and the incentives? Well, they never really change. That is what really makes his books fun to read.

They could, I suppose. I

Michael Maiello — Tue, 01 Apr 2014 16:12:28 +0000

In reply to I'm afraid I'm somewhat

They could, I suppose. I think it's just less likely. Also, doubt you had to type the fractions into anything... either handwrote them or hit a key since there were only so many fractions...

I'm afraid I'm somewhat

Verified Atheist — Tue, 01 Apr 2014 15:35:30 +0000

In reply to Everybody Knows The Dice Are Loaded...

I'm afraid I'm somewhat ignorant of how the financial sector works, but why couldn't one accidently enter $2⅓ instead of $42⅓ just as easily as entering $2.50 instead of $42.50? I suppose the bigger factor is the switch from handwriting bids to keyboarding them.