Tagged: protected quotes

Market Electrolysis

Have you seen those Pure Michigan ads? Compelling. Summer in Colorado could be a brand too, as these views of Hanging Lake near Glenwood Springs and Vail at morning last week attest. We seize every chance to savor the high country.

Speaking of chance, high-frequency trading (HFT) is back in the news. When you read about HFT in the financial press, it refers to stock orders from proprietary traders (firms using their own money rather than executing orders for customers) using powerful machines to trade in fractions of seconds.

But that description propagates an incorrect perception of what’s happening. It’s a vision of anonymous and rapacious rapscallions hiding behind banks of computers and cackling evilly while out-sprinting hapless investors from trade to trade, looting financial markets.

The truth is simpler and less execrable. Investor relations pros, you need to understand not just what HFT is, but why it exists and what’s both good and bad about it.

I was just reading a blog post by John Tamny extolling the virtues of HFT. Mr. Tamny is a regular commentator on TV financial programs, a free-market kind of guy. I routinely encounter folks opposed to “banning” HFT because it’s free-market behavior. (more…)

Do Traders Use Protection?

It’s a question that burns in the minds of IROs daily. No, not that one. This one: “Will an ISO post to the Nasdaq if the TIF modifier is one other than an IOC?”

Sentences like that are why alcoholism remains widespread. It’s also the reason IR folks don’t want to know how markets work. Too complicated.

Yet if we’re brutally honest, we know we should understand more. I mean, you can’t claim to be a great Yankees fan and not know the rules of baseball.

The sentence above from Nasdaq Reg NMS FAQs says: If I’ve chosen to fill my order up to the designated number of shares at a set price without leaving the Nasdaq to check for better prices elsewhere, suppose the time to complete the order is something besides “immediately or forget it.” Will that order be accepted at the Nasdaq?

This is how markets work. If you want homework, Google “Rule 611 Reg NMS.” (more…)