NYTimes article: Senate Hearing on Fairness of High-Speed Stock Trading Could Get Heated June 16, 2014 PDF article
Reflecting on the U.S. Senate Hearing on HFT, June 17, 2014
Leave a reply
Monthly Archives: June 2014
U.S. Senate Hearing on HFT: Questions of Senators
Watching the U.S. Senate’s the Permanent Subcommittee On Investigations Hearing: Conflicts of Interest, Investor Loss of Confidence, and High Speed Trading in U.S. Stock Markets
Senator Ron Johnson: “Where do you get your data?” (in referring to the analysis of order execution costs)
Robert H. Battalio, Professor of Finance, University of Notre Dame: “From a major ibank (investment bank). We don’t have detailed/good data.”
Dr.K: Regulators/policy makers should have a record of all the transactions in financial markets so that their natural duty of ‘market oversight’ is easier to handle. In that case, academic researchers and regulators won’t have difficulty answering questions ‘what happened?’.
Senator John McCain: “Michael Lewis in his excellent book and 60 Minutes interview said markets are rigged. Are they?”
Bradley Katsuyama, President & CEO of IEX Group, Inc: Word ‘rigged’ may be used to describe markets.
Dr.K: Best marketing campaign for IEX exchange.
U.S. Senate Hearing on HFT: Statements of Senators
Watching the U.S. Senate’s the Permanent Subcommittee On Investigations Hearing: Conflicts of Interest, Investor Loss of Confidence, and High Speed Trading in U.S. Stock Markets
Senator John McCain: SEC’s Reg NMS should be changed.
Dr.K: Reg NMS was supposed bring “best price” execution to the equity markets. If advances in technology and market structure changes result in different outcome from the intended consequences of regulation, this does not mean that the new practices, i.e. HFT as Senator McCain suggested, are “bad”. It just suggests that policy/regulation is slow in their oversight of the markets. And law makers referring to the book “Flash Boys” by Michael Lewis as one of their reasoning for a hearing also suggests that regulation/policy making is reactive as opposed to proactive.
Senator Carl Lewin: High Frequency Traders have predatory practices. Co-location is not fair.
Dr.K: Exchanges create the trading structure within the current regulations and given that market structure any trading practice which appears to be taking advantage of opportunities should not be blamed. Co-locating one firm’s server, by purchasing space sold by the exchange, next to that exchange’s matching server is no different than a firm or individual becoming a member (by purchasing a seat) of the exchange and stand on the floor next to specialist to transact during the “floor trading” days.
Dr. Karagozoglu’s Publication was referenced by CFTC’s Sub-Committee on Automated and High Frequency Trading
Dr. Karagozoglu’s research article titled “Direct Market Access in Exchange-Traded Derivatives: Effects of Algorithmic Trading on Liquidity in Futures Markets”, published in The Review of Futures Markets, Summer 2011, v.19, special issue, pp. 95-142, was referenced at the presentation of the Sub-Committee on Automated and High Frequency Trading on June 20, 2012. Presentation in PDF format.
CFTC Technology Advisory Committee meeting June 20, 2012
U.S. Commodity Futures Trading Commission-CFTC Technology Advisory Committee Meeting Schedules
TAC Meeting Video June 20, 2012
Julie Segal Senior Writer, Institutional Investor Magazine tweets HFT, Fair and Balanced post
Julie Segal Senior Writer, Institutional Investor Magazine tweets HFT, Fair and Balanced post at the TabbFORUM as thought leadership from Dr. Ahmet Karagozoglu
Senate hearing on high-frequency trading to look at market fairness – The Tell – MarketWatch
Senate hearing on high-frequency trading to look at market fairness – The Tell – MarketWatch.
Dr. Karagozoglu is quoted in MarketWatch by The Wall Street Journal: “One of the difficulties these days is that financial markets have changed so much because of the technology,” said Ahmet K. Karagozoglu, finance professor at Hofstra University. “Financial regulators have to catch-up with the pace of technology.”
Ceremony for Hofstra students who complete the Bloomberg Essentials Program
Hofstra’s Zarb School of Business and Department of Finance offer students the opportunity to obtain Bloomberg Essentials designation by completing a self-study designed and provided by Bloomberg in the Martin B. Greenberg Trading Room which is equipped with 34 Bloomberg Professional terminals. For the last 10 years, Hofstra students are trained in the state of the art trading room utilizing the resources of the facility which include various finance databases and analytical applications in addition to its centerpiece Bloomberg system.
During the 2013-2014 academic year, record number of students participated in Bloomberg workshops. Undergraduate and graduate Hofstra students from BBA, MBA and MS in Finance programs as well as from the Master of Science in Quantitative Finance program successfully completed the BESS program.
As a reward for those Hofstra students’ dedication and performance, at the end of every academic year in the Spring Dr. Ahmet Karagozoglu arranges a visit to the Bloomberg Headquarters in New York City which includes a tour of the Bloomberg’s high-tech building and the BESS Ceremony. Students who successfully completed their Bloomberg Essentials Program receive the acknowledgement of their designation during the ceremony from Bloomberg staff.
HFT, Fair & Balanced: An Academic and Historic Perspective :: TabbFORUM – Where Capital Markets Speak
‘Flash’ Enters the Financial Vocabulary
The term “flash” first appeared within the context of a new process of quote or order displays that are measured in milliseconds – that is, “flash quotes.” Utilizing this new process to trade has been referred to as “flash trading.” … … The unprecedented events of May 6, 2010, are referred to as the “Flash Crash.” However, given that the S&P 500 Index E-mini futures contract price declined by more than 5% between 2:32:00pm and 2:45:28pm AND rebounded by around 5% between 2:45:33pm and 3:00:00pm, in all fairness this event should be referred to as the “Flash Crash & Recovery” or the “Flash Bounce.”
3rd Annual Wall Street Trip for Class of 2014 Quant Finance students at Hofstra
Finance Department in the Zarb School of Business at Hofstra University treats its graduating class of Master of Science in Finance (MSF) and Master of Science in Quantitative Finance (MSQF) students with its Annual Wall Street Trip which is organized by Dr. Ahmet Karagozoglu and Dr. K.G. Viswanathan, who is the Chairperson of Finance Department.
3rd Annual Wall Street Trip took place on Thursday May 22nd, following the Sunday May 18 commencement ceremony where 50+ MSF and MSQF students graduated with their masters degrees. This year finance professors Dr. Sinan Cebenoyan and Dr. Ahmet Karagozoglu accompanied their students.
Finra: poor controls around HFT a big concern – Risk.net
Finra: poor controls around HFT a big concern
By Jessica Meek | 22 May 2014 | Risk.net Operational Risk & Regulation
Technology getting out of control is the biggest concern with high-frequency trading (HFT), the US Financial Industry Regulatory Authority’s (Finra) chief information officer told delegates at the North American Financial Information Summit in New York on May 21, 2014.
RiskQuant 