"We risk becoming the best informed society that has ever died of ignorance"
- Rubén Blades

"You can't make up anything anymore. The world itself is a satire. All you're doing is recording it"
- Art Buchwald

"It's getting exciting now, two and one-half. Think of everything we've accomplished, man. Out these windows, we will view the collapse of financial history. One step closer to economic equilibrium"
- Tyler Durden

"It is your corrupt we claim. It is your evil that will be sought by us. With every breath, we shall hunt them down."
- Boondock Saints

Monday, December 12, 2011

TEDxConcordia - Yan Ohayon - The Impact of Algorithmic Trading

Yan Ohayon demystifies and shares his experience with algorithmic trading and its impact on markets, our lives, and everything in between.  He captures the truth of the "New Wall Street" and aids in the basic breakdown of what the people behind the machines may be seeking to create the profits.  Know your enemy.

"NYSE main mandate was to regulate markets and to create order, a place where people could raise capital.  Today their main mandate is shareholder value creation".   Markets exchanges, according to Yan, take approximately 126 microseconds to ask the market for a price and trade times are roughly 400 micro-seconds which leaves a holding period of 148 microseconds.  On a conservative calculation, Yan says 1.2 million trades would have taken place within 8 minutes, assuming this is ONLY 1 stock.  And in a shocking claim he states "the speed of light and fiber-optics are slowing us down", aww poor guys.  Then says about human traders "they simply cannot compete with us".  I hope the Wharton kids know this. As for competing with you HFT guys, you want to bet we can't compete?  And in the end all he goes on to explain the thought process behind "quote stuff".