muses of the moment

March 11, 2014

High Frequency Trading

Tyler Durden via zerohedge had an excellent article this morning about the amazing winning percentages of HFT platforms. Apparently the big market for “winning” is currencies. Making fiat money on fiat money with the fastest computer. Fake money and fake traders. Welcome to the virtual world.

Click here.

But the most interesting thing about this post is not that computers control HFT trading, that the fastest and closest computers always win, that these HFT fat fingers can take down a market in milliseconds, or that currency markets are the main trading market they use to do it.

The scary thing about this chart is that there is a losing side to the winning computer’s HFT bet. Those extraordinary profits were taken from someone’s capital, debt, or savings. And who is that losing side? This is a another angle of the biggest wealth transfer in history.

Side musing: gg thought this little item about Ukraine’s gold air-lifted to NYFed for “safe-keeping” was interesting. Click here. Maybe it is collateral for that billion dollar loan?

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