I for one, am against BOT's as already mentioned on this thread it creates an unfair playing field. These BOT's can buy, sell or pull an order in microseconds and in effect manipulate the SP to whichever they want.
The ASX wont worry as it generates a nice income from the companies that place their systems next to the ASX servers and from the high amount of trades.
What needs to be done is either:
1: Make them illegal so everyone has to trade on a level playing field
2: Increase the trading fee to the minimum which we all pay per transaction.
3: Charge a tax on the HFT trades.
4: Royal commission into the ASX
Italy has imposed a tax of HFT
https://www.cnbc.com/id/101002422 "Early evidence in Italy suggested that volumes were already being affected. In the first week after the first part of Italy's tax was implemented, volumes appeared to plummet on Milan's benchmark index, the FTSE MIB, with a drop to 30 percent of their 90-day average, according to Reuters."
A few sites to have a look at"
https://www.copyright link/markets/the-highfrequency-trading-bonanza-is-over-heres-why-20180102-h0cm09https://marcustoday.com.au/webpages/832_education.php guid=1b1264ec43695d6138d6887bf6bb4a1a&id=29881disallowed/money/investing/share-wars-how-the-robots-are-robbing-you-20120825-24t4t.htmlThere are other ways to manipulate:
Market makingMarket making involves placing a limit order to sell (or offer) above the current market price or a buy limit order (or bid) below the current price on a regular and continuous basis to capture the bid-ask spread. Automated Trading Desk, which was bought by Citigroup in July 2007, has been an active market maker, accounting for about 6% of total volume on both NASDAQ and the New York Stock Exchange.
Statistical arbitrageAnother set of HFT strategies in classical arbitrage strategy might involve several securities such as covered interest rate parity in the foreign exchange market which gives a relation between the prices of a domestic bond, a bond denominated in a foreign currency, the spot price of the currency, and the price of a forward contract on the currency. If the market prices are sufficiently different from those implied in the model to cover transaction cost then four transactions can be made to guarantee a risk-free profit. HFT allows similar arbitrages using models of greater complexity involving many more than 4 securities. The TABB Group estimates that annual aggregate profits of low latency arbitrage strategies currently exceed US$21 billion.
A wide range of statistical arbitrage strategies have been developed whereby trading decisions are made on the basis of deviations from statistically significant relationships. Like market-making strategies, statistical arbitrage can be applied in all asset classes.
Event arbitrageA subset of risk, merger, convertible, or distressed securities arbitrage that counts on a specific event, such as a contract signing, regulatory approval, judicial decision, etc., to change the price or rate relationship of two or more financial instruments and permit the arbitrageur to earn a profit.
Merger arbitrage also called risk arbitrage would be an example of this. Merger arbitrage generally consists of buying the stock of a company that is the target of a takeover while shorting the stock of the acquiring company. Usually the market price of the target company is less than the price offered by the acquiring company. The spread between these two prices depends mainly on the probability and the timing of the takeover being completed as well as the prevailing level of interest rates. The bet in a merger arbitrage is that such a spread will eventually be zero, if and when the takeover is completed. The risk is that the deal "breaks" and the spread massively widens.
SpoofingOne strategy that some traders have employed, which has been proscribed yet likely continues, is called spoofing. It is the act of placing orders to give the impression of wanting to buy or sell shares, without ever having the intention of letting the order execute to temporarily manipulate the market to buy or sell shares at a more favorable price. This is done by creating limit orders outside the current bid or ask price to change the reported price to other market participants. The trader can subsequently place trades based on the artificial change in price, then canceling the limit orders before they are executed.
Suppose a trader desires to sell shares of a company with a current bid of $20 and a current ask of $20.20. The trader would place a buy order at $20.10, still some distance from the ask so it will not be executed, and the $20.10 bid is reported as the National Best Bid and Offer best bid price. The trader then executes a market order for the sale of the shares they wished to sell. Because the best bid price is the investor’s artificial bid, a market maker fills the sale order at $20.10, allowing for a $.10 higher sale price per share. The trader subsequently cancels their limit order on the purchase he never had the intention of completing.
Quote stuffingQuote stuffing is a tactic employed by malicious traders that involves quickly entering and withdrawing large quantities of orders in an attempt to flood the market, thereby gaining an advantage over slower market participants. The rapidly placed and canceled orders cause market data feeds that ordinary investors rely on to delay price quotes while the stuffing is occurring. HFT firms benefit from proprietary, higher-capacity feeds and the most capable, lowest latency infrastructure. Researchers showed high-frequency traders are able to profit by the artificially induced latencies and arbitrage opportunities that result from quote stuffing.
I am just waiting for the new leaching process, the SS and the PFS all within the next 6 months and hopefully the SP rising to and above its previous high on 21 March 2018.
My comments/posts are based completely on my own experience thoughts and interpretation along with my current financial position at the time.Conduct your own due diligence, consult a licensed financial advisor or broker before making any and all investment decisions. As usual all constructive criticism welcomed.Good luck to all that hold.
