US Stock market "Rigged"

[thethe]

http://finance.yahoo.com/news/high-speed-traders-rip-investors-040100829.html

I have believed this stuff for a while. We are all being robbed blind.

[weso1]

I don't understand any of that. I do think it's pretty clear though that there are people who know how to play the game, and the rest of us that don't. The stock market is extremely complicated.

[zitothebrave]

I don't understand any of that. I do think it's pretty clear though that there are people who know how to play the game, and the rest of us that don't. The stock market is extremely complicated.

Stock market isn't complicated, it's built to consolidate wealth. Rich get richer on you.

[thethe]

I don't understand any of that. I do think it's pretty clear though that there are people who know how to play the game, and the rest of us that don't. The stock market is extremely complicated.

When you know what the demand of a certain security or group of securities is prior to the regular investor then you have a DRASTIC advantage.

We are literally being robbed of billions of dollars and nobody does a thing about it.

There is going to be a revolution soon enough. Its things like this that really have be going back and forth on my economic beliefs.

[thethe]

Stock market isn't complicated, it's built to consolidate wealth. Rich get richer on you.

Yup, and the consolidation of wealth is always a precursor to instability.

[weso1]

Stock market isn't complicated, it's built to consolidate wealth. Rich get richer on you.

I just mean all of its nuances are complicated. You gonna tell me you know how to create a computer program to figure out the quick trades in the market?

The stock market, the fed and the arrival of the internet and all its associated technologies have all combined to consolidate wealth. Also, the housing crash and its associated recession has created a temporary spike in wealth consolidation.

[thethe]

I just mean all of its nuances are complicated. You gonna tell me you know how to create a computer program to figure out the quick trades in the market?

The stock market, the fed and the arrival of the internet and all its associated technologies have all combined to consolidate wealth. Also, the housing crash and its associated recession has created a temporary spike in wealth consolidation.

Did you read the part where the tech company spent 300 million dollars to just gain microsecond faster information. When you are a high volume trader that short period of time results in millions of profits.

[Krgrecw]

Thethe, this is all due to the advancement of technology. Figured everyone knew this was going on.



It's really no different than a calculator. It can do mathematical equations in under a second that would take us a while by hand

[thethe]

Thethe, this is all due to the advancement of technology. Figured everyone knew this was going on.



It's really no different than a calculator. It can do mathematical equations in under a second that would take us a while by hand

I don't see how this is similar at all when you consider that these high frequency traders are shaving billions worth of profit from the average investor. This is disgusting and is why so many in this country believe the wealthy are evil scum.

[Krgrecw]

Aren't you an accountant? If you got paid per an account you'd be able to do a lot more accounts then someone did before calculators? Correct. So you'd be making more money because technology helps you do your job better. Should they complain because you make more? All you did is use a 'device' to help you get done faster and make more money.





If slickdeals.Net has a good deal on a tool set you and I both want but your on some turbo extreme fast as **** internet and I'm
On dial up, you'll be able to get to the site, click a link and buy it faster than I would. Is that fair to me? Nope it's life.


You're just looking at the word 'billions' and getting pissed at the rich when technology gives you more advances than most have

[thethe]

You are conveniently glossing over the fact that this technology is allowing the high frequency traders to become a middle man on sales that they have no business being in. Its absolutely shaving profit away from the middle class and accomplishing exactly what the wealthy want. To take all the money and keep it from themselves. Its absolutely outrageous and I can't understand how ANYONE can defend this with some an example as you are describing.

They have basically found a way to travel back in time and trade in the present with future information.

[gilesfan]

You have every right to buy whatever stock u want or pay Merrill lynch to be ahead of the game for you.

[thethe]

So you are fine with trading on not public information then?

[zitothebrave]

You have every right to buy whatever stock u want or pay Merrill lynch to be ahead of the game for you.

Then when an exec short sells the stock to make a profit you lose money 2 ways.

[thethe]

Then when an exec short sells the stock to make a profit you lose money 2 ways.

Some people will blindly follow an ideology regardless of new information that comes out. Its a shame.

[Oklahomahawk]

Oh and don't forget Congress can insider trade all day long and twice on the weekends now, totally legally!!! Isn't it absolutely disgusting how the American people and their MTV video attention spans lost all their righteous indignation about that absolute effing fraudulent crap???

[gilesfan]

Some people will blindly follow an ideology regardless of new information that comes out. Its a shame.

My stock accounts are doing well. I'm happy.

[thethe]

My stock accounts are doing well. I'm happy.

As are mine. But should they be doing better is the question. Just because you are making higher than average returns doesn't mean you still aren't being robbed.

[zitothebrave]

My stock accounts are doing well. I'm happy.

And that's how they get you. They make you think you're doing something special to keep you happy while they steal from you. If someone shaves 10% off the top and tells you you're getting richer, you'll of course be happy.

[thethe]

And that's how they get you. They make you think you're doing something special to keep you happy while they steal from you. If someone shaves 10% off the top and tells you you're getting richer, you'll of course be happy.

And people like GF will just eat it up. This is disgusting. Just being robbed blind.

[gilesfan]

And that's how they get you. They make you think you're doing something special to keep you happy while they steal from you. If someone shaves 10% off the top and tells you you're getting richer, you'll of course be happy.

I don't think you understand how it works.

[zitothebrave]

I don't think you understand how it works.

I do. Has your buying power increased significantly?

[thethe]

Giles, do you trade on your own or use a broker?

[gilesfan]

And people like GF will just eat it up. This is disgusting. Just being robbed blind.

You have the right to decide what stock you want to buy or sell or not buy at a price you choose. If you are smart, you can take advantage.

[gilesfan]

Giles, do you trade on your own or use a broker?

Both

[gilesfan]

I do. Has your buying power increased significantly?


Yes

[zitothebrave]

Yes

By what percentage?

[thethe]

You have the right to decide what stock you want to buy or sell or not buy at a price you choose. If you are smart, you can take advantage.

And you believe its right to have people know what you are about to buy before the transaction is processed?

[gilesfan]

By what percentage?

My account I pick- about 7% per year last 3 years.
Merrill only had 1.5 to 2 years. Think close to 10%

[gilesfan]

And you believe its right to have people know what you are about to buy before the transaction is processed?

Doesn't bother me. I purchase stocks to hold long term, doesn't make difference

[zitothebrave]

My account I pick- about 7% per year last 3 years.
Merrill only had 1.5 to 2 years. Think close to 10%

And is that adjusted for inflation? And for inevitable taxes?

[gilesfan]

And is that adjusted for inflation? And for inevitable taxes?

Don't have to pay taxes till I sell.

[zitothebrave]

Don't have to pay taxes till I sell.

So the answer to both of those is no then right?

[gilesfan]

So the answer to both of those is no then right?

Right. Inflation rates are minuscule last few years

When I sell them my income is going to be close to nothing.

[zitothebrave]

You do realize that inflation over the last 3 years has gone up like 7.7%. And the Stocks have been in a sharp rise over that time period that almost certainly won't continue right? SO you see where I'm going, I don't have to spell it out for you do I?

[gilesfan]

Yep, investing in stock market has been great!

[zitothebrave]

What that means is in one of the biggest growths in the stock market where the Dow has almost tripled, you've paid someone to barely outgain inflation. If you pt that money into a number of things and gotten better return. hell if you just spent it on something you wanted you would have gotten a better return.

[gilesfan]

What that means is in one of the biggest growths in the stock market where the Dow has almost tripled, you've paid someone to barely out gain inflation. If you pt that money into a number of things and gotten better return. hell if you just spent it on something you wanted you would have gotten a better return.

After paying someone I've out gained inflation and also out gained inflation on my own account.

Since 09:

-0.4
1.6
3.2
2.1
1.5


Yet, I've gained over 7% per year. Zito calls this "barely out gaining inflation"

I will take that over spending it on 8 dollar bottles of mustard.

[Tapate50]

What that means is in one of the biggest growths in the stock market where the Dow has almost tripled, you've paid someone to barely outgain inflation. If you pt that money into a number of things and gotten better return. hell if you just spent it on something you wanted you would have gotten a better return.

:facepalm:

[Tapate50]

You do realize that inflation over the last 3 years has gone up like 7.7%. And the Stocks have been in a sharp rise over that time period that almost certainly won't continue right? SO you see where I'm going, I don't have to spell it out for you do I?

Source ?

[Krgrecw]

So where does/ would Thethe and Zito put Thier money if they don't put it in the market?

The market is where you make money.

[weso1]

There do exist low fee mutual funds if that is what zito is talking about. Vanguard is known for this. I personally do believe that low fee mutual funds are just as good as the high fee annuities for the most part.

[gilesfan]

So where does/ would Thethe and Zito put Thier money if they don't put it in the market?

The market is where you make money.

I prefer real estate, but gotta diversify so I throw some in the stock market as well.

[zitothebrave]

So where does/ would Thethe and Zito put Thier money if they don't put it in the market?

The market is where you make money.

The market is where rich people make money. Or traders make money.

Edit - Can't forget politicians.

[Tapate50]

The market is where rich people make money. Or traders make money.

Edit - Can't forget politicians.

So you are argueing against yourself without an alternative?

[zitothebrave]

So you are argueing against yourself without an alternative?

There are plenty of ways to make money.

[NinersSBChamps]

Get the scoop on natural disasters before they happen. Invest in whatever substance will aid in things and you are golden. I think there was some guy who invested a ton into salt and after the blizzards and such down south he made a killing.

[zitothebrave]

I invested a ton of money in Tacos before Colorado and Washington legalized pot. I'm rolling in the tortilla wraps.

[NinersSBChamps]

I invested a ton of money in Tacos before Colorado and Washington legalized pot. I'm rolling in the tortilla wraps.

I want to open up a White Castle out here. (Colorado)

[Oklahomahawk]

I would think a simple kiosk or children's style lemonade stand that served brownies and Doritos would also clean up, possibly some Tylenol for any residual headaches?

[acesfull86]

Another view on this story (http://www.businessweek.com/articles/2014-04-01/what-michael-lewis-gets-wrong-about-high-frequency-trading?curator=MediaREDEF):

1. HFT doesn’t prey on small mom-and-pop investors. In his first two TV appearances, Lewis stuck to a simple pitch: Speed traders have rigged the stock market, and the biggest losers are average, middle-class retail investors—exactly the kind of people who watch 60 Minutes and the Today show. It’s “the guy sitting at his ETrade (ETFC) account,” Lewis told Matt Lauer. The way Lewis sees it, speed traders prey on retail investors by “trading against people who don’t know the market.”

The idea that retail investors are losing out to sophisticated speed traders is an old claim in the debate over HFT, and it’s pretty much been discredited. Speed traders aren’t competing against the ETrade guy, they’re competing with each other to fill the ETrade guy’s order. While Lewis does an admirable job in the book of burrowing into the ridiculously complicated system of how orders get routed, he misses badly by making this assumption.

The majority of retail orders never see the light of a public exchange. Instead, they’re mostly filled internally by large wholesalers; among the biggest are UBS (UBS), Citadel, KCG (KCG) (formerly Knight Capital Group), and Citigroup (C). These firms’ algorithms compete with each other to capture those orders and match them internally. That way, they don’t have to pay fees for sending them to one of the public exchanges, which in turn saves money for the retail investor. For a detailed map of the market’s plumbing and how orders get filled, check out this Bloomberg Businessweek graphic from 2012.

Many retail investors enter the market through buy-side institutional investment firms such as pension and mutual funds. Lewis contends that these big, slow traders are also getting screwed by HFT. While that certainly might have been the case a decade ago, they caught up years ago. Talk to most chief investment officers at these big firms today and you’re more likely to hear how efficient trading is today, compared to 20 years ago—back in the era when orders got routed through human market-makers standing on the floors of exchanges.

Last year, I spoke with Gus Sauter, the former chief investment officer at Vanguard, one of the biggest buy-side investment firms in the U.S. By the time he retired in 2012, he had about $1.75 trillion under his watch. Rather than decrying speed traders, Sauter praised the benefits it had brought to him and his clients. By his estimate, speed traders helped him save him more than a $1 billion a year.

2. Speed trading isn’t hugely profitable. Lewis gives the impression that high-frequency trading firms are rolling in dough. The reality, however, is that HFT’s best days are behind it, and many firms are barely keeping their heads above water. Getco, which merged with Knight and was once a titan of HFT, experienced a profit drop of 90 percent in 2012. That year, according to estimates from Rosenblatt Securities, the entire speed-trading industry made about $1 billion, down from its peak of around $5 billion in 2009. That’s nothing to sneeze at, but it isn’t impressive once you put it into context: JPMorgan Chase (JPM) made more than $5 billion in profit in just the last quarter.