Running discussion on SP, page-6401

Share wars: how therobots are robbing you

Robots don't have to take over the world when they've got sharemarkets in their clutches already.

Unlike a mere mortal trading, there isn't even a broker between machine and, well, machine. All that stands between them is a fee the Australian Stock Exchange collects…..

Self-automated algorithms can generate 150 trades in the blink of an eye and, unlike ordinary investors or even the big funds, have been given the ultimate privilege of plugging straight into the ASX's computer. They're the ultimate inside traders.

Since the one-minute massacre of QBE Insurance more than two years ago by a rogue robotic trading program, all that has changed is that now it would take a mere millisecond. And it wouldn't stop at one stock.

The share price was savaged from $15.70 to less than a cent before anybody could do anything…..

So entrenched has speed trading become on Wall Street and in most of Europe that, in this globalised world, Australia's regulators haven't so much gone along with it as only suddenly realised what's crept up on them.

In any case, the ASX is compromised because it let the computers into its data room in the first place, lured by the prospect of fees on tiny - but relentlessly frequent - trades…..

But imagine the advantage a robo-trader would have in knowing before you.

That used to be called insider trading. Now it's ''liquidity enhancement'' and it's legit…..

Share Wars