Tagged: Invesco

Reg Nemesis

Omaha!

Rather than Nebraska, we’re in Steamboat Springs enjoying spectacular slopes before this weekend’s big game between our Broncos and the Seahawks.

Denver quarterback Peyton Manning uses the word “Omaha” to change plays or alert his team to shifting defensive coverage. In football, both defenses and offenses try to confuse the opposition with different formations. It’s deception.

In the stock market, the principal purpose of algorithms is to deceive and algorithms execute 90% of stock orders now. The stock market isn’t supposed to contain “the opposition” but buyers and sellers who want to find each other. Why are they hiding instead?

Part of the problem is Regulation National Market System. If you didn’t see Wall Street Journal writer Jacob Bunge’s piece (if you can’t open the link, email me and I’ll send the story) on what’s popularly called “Reg NMS” yesterday, it’s required reading for every IRO, CEO and CFO at public companies.

Two vignettes from Mr. Bunge’s story: (more…)