Tagged: equity markets

Algo Rhythm

At Winter Park Sunday scooting off the Panoramic high-speed chair at 12,060 feet and cooking downslope on skis, the trip was anything but algorithmic.

No, skimming from summit to the lift slow zone was uniquely and individually exhilarating. But in equity markets, unique exhilaration more often comes from derivative bets that randomly pop stocks 7-8%. Otherwise, your shares blend with millions of other securities across asset classes mixed and matched in proprietary recipes aimed at unique outcomes from ordinariness.

Last week, we likened the movie Moneyball, about baseball statistics, to how stocks trade today. Let’s go one step further. Your story is unique. You differentiate your performance from your peers. We as individuals want to be valued on our own merits. So we hope our company’s shares are examined discretely.

Institutional and retail investors want the same thing, right? Distinct success stories, diamonds in the rough. Listening to advertisements from big mutual funds, you get the sense that analysts are rooting in the rice paddies of southeast Asia to learn why fiber optics from the Philippines are the next big opportunity for a German manufacturer of diodes. Or whatever. (more…)

Pay Attention to Your Trading

We’re leaving most of this week’s email to our friend Joe Saluzzi at Themis Trading. Joe is a groundbreaking and thoughtful critic of contemporary trading, and among the smartest people we know. Last October, Steve Kroft interviewed Joe on 60 Minutes about our machine-driven markets.

Read what Joe says below about the recent Nasdaq website security issue. Even if you trade elsewhere. You all trade everywhere today. Do you know how much of your volume trades on your listing exchange?

How about your volume at other venues? The brokers executing these trades? The smallest investor trading just 100 shares can know whether a trade is executed on an agency or principal basis. But public companies don’t even know the brokers behind the majority of trades.

How about your daily short volume? Exchanges are currently implementing circuit breakers on short trades as required under SEC amendments to Reg SHO. But public companies don’t even know what part of their daily volume is short. (more…)