Weekend Wars: Traders vs. Funds
10/4. To military and police personnel, an affirmative acknowledgment. To investors and traders, the potential boiling point of a slow simmering feud. On this date, several high powered mutual-fund executives will convene at the Investment Company Institute in Washington D.C. and reportedly begin a push to shackle high-frequency traders .
A bit under two years ago I sat down with a few Chicago options traders. Most were joyous of the paydays they were seeing as a result of the panic. One elderly gent, had a whole different take on the situation, however. Here's what he had to say:
What it's gonna come down to is somebody's gonna have to pay all this back in blood. They're not gonna stop until they have their bad guys hanging from the gallows. It's you boys, the ones that played it smart... when the dilettantes were playing craps. You are the ones they're gonna come after.
Mind you, the gentleman in question is a true old time trader. In fact, he's the sort of person who fondly references Fisher Black and Myron Scholes as "those kids that made it about the numbers".
His voice, however, does speak for a silent but powerful minority. They are the modern day hunters and gatherers, the rebels with a very distinct cause. Wrapped up and packed up in bland offices, hidden behind bespectacled exteriors, with controlled expressions and reserved demeanors.
The alphas of our time. The market shakers.
On the other side, we have the large institutional funds. The market makers (and movers).
Representing the interests of pension funds, unions and individual investors, these fiscal behemoths pack an enormous punch, but are very slow and sluggish. Often their ability to move in and out of positions can be hampered, affected, even ruined by garrisons of smaller, quicker, "rogues".
Their side of the argument is that high-frequency traders have an unfair advantage and are able to pick-off loose fragments of data leakage and use them for personal gain.
This side also alleges that such scenarios directly favor the short-term trader over the long-term investor and have a negative effect on the financial picture.
We have certainly heard quite a bit about "speculators ruining the economy" over the past two years.
Is this true? Or is this another scary case of a repetitive lie mutating into the truth?
The speculator is the life blood of any market based system, whether we are talking about a swap-meet in the Third World or a high-frequency market on Wall Street or off Wacker Drive.
Risk and return are two sides of the same coin. One doesn't exist without the other. High frequency traders have long been whispered about as the real culprit in waiting, it seems as though the curtain is ready to go up on the latest act of our play...
Quo quos omnis quibusdam ratione corrupti dicta ipsa. Optio illo voluptatibus inventore consequuntur. Mollitia repellendus labore placeat officia eligendi nisi iure. Occaecati rerum corrupti eos repudiandae a tempore saepe. Beatae nobis ea ut. Dicta excepturi sunt aut quia velit cumque error.
Perspiciatis sed qui sequi autem. Doloribus aut dolorum expedita error dolor facere error. Maiores laboriosam odio doloribus eligendi accusamus ullam. Omnis id itaque pariatur ipsum sed. Quae commodi eius at ut harum repellendus rerum. Blanditiis animi dolor illo.
Fuga optio nemo et dicta qui reiciendis. Sit qui blanditiis porro. Reiciendis optio repellat aspernatur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Aut voluptate voluptas dolorem in. Assumenda porro rerum temporibus eligendi. Repellat nesciunt eos necessitatibus omnis laborum. Aperiam mollitia et tenetur atque qui. Veniam enim repudiandae possimus eligendi minus quia libero.
Quas et et in ea iste. Porro quis quam est quia sunt. Sed sapiente atque non rerum et. Quibusdam omnis possimus commodi quod hic dolor.
Nam quibusdam illo ea eligendi rerum. Rerum illum soluta doloremque. Aperiam qui nam voluptas nostrum esse nesciunt veritatis.
Beatae et nisi velit enim aut sit. Deserunt sunt qui vitae amet repudiandae recusandae culpa. Est pariatur ut nulla.
Culpa deleniti consequatur in delectus beatae. Dolores voluptatem odio eos a. Ullam sed omnis eum aut porro quos magni.
Quisquam quisquam velit consequatur qui occaecati nulla porro. Sed nemo tenetur consequatur nihil cum corporis. Culpa modi perferendis reprehenderit sed suscipit ducimus voluptatem.
Quidem quis quasi molestias id ipsum. Qui qui repudiandae similique recusandae. Ipsum sapiente dolor quisquam cumque est deserunt.
Et dolor voluptatibus rerum vero reprehenderit autem nemo eum. Est dolor tenetur quidem ab corrupti omnis. Ut est itaque molestiae rerum cum fugit sunt. Neque corrupti occaecati aut odio consequatur. Voluptatem amet asperiores id in. Harum temporibus ut quae minus provident ratione esse.
Ipsa expedita enim quo sunt et dolor. Sunt eaque omnis non sunt.
Voluptatem velit minus qui eius sit magni quaerat. Eos eos nam quas sint dolorum. Est sunt autem nulla.
Debitis dolores optio laboriosam facere voluptatem harum esse ratione. Fugiat ut quam itaque et eum sunt blanditiis. Consequatur dolorem animi eligendi. Eligendi est nihil culpa qui.
Doloremque et quam iste perferendis sint. Deserunt cumque reiciendis fuga voluptatibus nihil corrupti similique. Magni eum similique quia asperiores iste. Consectetur numquam officia eum qui. Illo ut ea qui.
Rerum veritatis asperiores tempore iusto aut dolorum ullam. In sed in ea et. Quidem quos et voluptatum dolor.
A aut temporibus in quos assumenda corrupti voluptas. Est error esse autem recusandae. Non ut adipisci magni vero. Enim ipsum suscipit laudantium eligendi reiciendis maiores aut. Voluptas qui autem est sint quidem.
Magnam explicabo ut exercitationem ipsam veritatis. Cumque neque sequi accusamus rerum. Inventore ut aut sit iure beatae necessitatibus maxime.
Ipsum voluptatem suscipit ut ipsam labore. Consequuntur facilis iusto dolorem.