ann. out, page-24

victorious “This one was a buying bot so everyone should be ok.”



“everyone”: - Not really, the algorithms used on the buy side are designed to keep a low profile, and will only step up to the plate in increments that don’t disturb the price very much. An auto shutdown, if you like, with a pre determined threshold. Thus a seller gets the impression of hardly any movement towards the price he would like to get. And naturally since humans with a dollar in mind are involved in the selling, they reach a level of impatience and quit for what they can get.

This is the essence of the idea - drill out the wavering members on the register.

Naturally a robot is patient with these moves, sometimes taking months to achieve the desired goal,(as has been happening with CQT for the last two). Certainly in most cases, dealing with a time frame humans don’t like to handle.

Whereas algorithmic trading used on the short side is designed for maximum impact once a carry-free threshold is reached. That is, sell most of them as high as possible without price disturbance, then dump the remainder like there’s no tomorrow. Which, then creates a self feeding, downward cascade, and opportunity for cheap re–purchase.

Just think of you having a Chess game with “Big Blue”, with maybe Clint Eastwood passing out advice now and then.

What sort of advice: Well “Are you feeling Lucky” comes to mind.

Mind you, it’s all legal. The stealth, that is - and the anonymity - and the low latency.


Notably the same practice was going on today. Repetetive trades at two second intervals