Hi FactorI agree with you.The following sentences from the ASX...

Hi Factor

I agree with you.

The following sentences from the ASX stand out to me as pure dribble:

"However ASX does require brokers to have in place appropriate electronic pre-execution order filters to ensure that their DMA trading does not interfere with the conduct of an orderly market or facilitate manipulative trading....

What are "appropriate electronic pre-execution order filters" ???????

AND who judges if trading is "orderly"
AND "who police's any "interference with the market conduct"
AND why should we simply trust these "pre-execution order filters" whatever they are...

Have they been programmed with the help of some "trustworthy" hedge fund manager? Who and by what standard are these filters "measured" as being "appropriate"??

Why should we simply accept what the ASX tells us and trust that these DMA trading systems are not "facilitating manipulative trading"???

The writer continues with more dribble:

"---manipulation is easier to achieve if the client submits orders to the market manually at the time and price at which they will achieve maximum price impact. Algorithmic trading usually does not allow this, given that it is programmed trading, executed without the intervention of a broker".

As you say, Factor, the person who wrote this is effectively saying that a broker is able to manipulate price by making trades manually BUT the same is NOT true for computers... What the! That's got to be deliberate gobbledygook...

Are we expected to be silly enough to believe that a computer programmed to trade hundreds of small buy/ sell and long/ short orders in low volume stocks are unable to move/ manipulate the price but a broker is able to manipulate price with $500 minimum trades???

I agree with you - this is complete and utter illogical BS...

Surely the person who wrote this does not really believe what they have written?


One of the problems is that the ASX is self regulating. The ASX has a "slight" conflict of interest in this as making complaints against your largest clients and largest source of revenue is not the way to expand your monopoly business...

This DMA trading must have been very profitable for the ASX relative to the "old fashioned" methods. What incentive is there to change if its so profitable for them? It is stupidity to think that this type of trading can be self regulated.

Surely other people - even non-traders - would be able to understand that the ASX response to your query makes no logical sense? I wonder if its worth showing this letter to the relevant politician/ ombudsman?

Every vote is important to them in the lead up to the election. They are more likely to be in vote buying mode at the moment. Just a thought...