Tagged: hudson river trading

MMI, not MMA

A good exit strategy. It’s always wise to have one.

With the polar vortex bearing down on the national midsection last week, our exit strategy, fortuitously, was sponsoring NIRI’s fundamentals of IR program in Santa Monica. Karen snapped this dusk photo in shirtsleeves from our 8th-floor balcony at the Loews Santa Monica Beach Hotel. Yes, we were smiling.

The letters “MMA,” as many of you know and equally many of you could hardly care less about, stands for “mixed-martial arts” and describes a contemporary take on Roman gladiators, except the people involved in it are probably less refined than their progenitors 1,500 years ago.

To us, high-frequency-trading is sort of the MMA of markets. It’s a brief, violent, high-speed contact sport. Having so uttered, I may expect now to hear from these traders’ new lobbying group called MMI – the Modern Markets Initiative – which seeks to cloak HFT in finer and more agreeable raiment.

Here’s what’s happening. Several HFT firms including Hudson River Trading and Quantlab Financial (I mentioned both in a recent MSM) have banded together, hired some former political strategists, and launched an organization intended to change public perceptions of HFT and flex HFT muscle in regulatory and political circles.

Claims the website: “High frequency trading firms and the market professionals behind them are harnessing technology to enhance price transparency and increase access to markets for investors that was previously only available to a select few.”

It’s an impressive effort to seize the agenda and refashion it. A flashy video at the site likens HFT to robotic mechanization in manufacturing – turning human tasks into ones driven by machines.

MMI recasts HFT not as arbitrage but as “automated trading technology” run by professional traders whose core purpose and function is to help everybody out by lowering trading costs, creating clearer prices and opening markets to more folks.

Well, shazam, let’s everybody hug! Right? Not exactly. We’re not criticizing the human ingenuity behind HFT. Traders didn’t create the rules requiring every node on the data network comprising the national market system to be connected in order to shuffle shares around the best price (imagine if the only differentiator in all products were price…human creativity would suddenly stampede off some permanent cliff into a gooey protozoan puddle). (more…)

Quant Trading at the Hudson

Spring finally tossed its verdant cape over the Denver Front Range. We saw it firsthand on our bikes from Sedalia to Palmer Lake last weekend, our first 40-plus miler of the year. It’s been too cold! We know you Californians among us are already past the early and midseason allergens.

Meanwhile in Manhattan, down on Old Slip between Water and South streets there hums and whizzes a sharp shop of folks whose cares are far removed from the seasons. And apparently geography too, for Hudson River Trading sits just off the East River. (more…)