Cortina I think its a complicated issue and I'm also suspicious...

Cortina I think its a complicated issue and I'm also suspicious that I longer buy and sell on a level playing field. There has been a heap of publicity in the past couple of weeks following the release of Michael Lewis' book 'Flash Boys: A Wall Street Revolt'.

I've invested for near on 40 years and was lucky enough to spend some time on the Sydney SX floor before it was computerised. Over the past couple of months I've noticed that prior to placing an order and checking the market depth, I place the order and find that the market depth has changed and my order is only partly filled. For a while I just thought it was unlucky and the market was moving between my checking the market depth and placing the order, but its been happening too frequently now.

As I said it could be due to the HFT traders having very fast computers and my orders being gazumped, and the fact that dark pools or other exchanges exist (such as Chi X) which require the broker to take more time to find the best deal and give these HFT traders that miniscule of a second they need to gazump me. They are happy to skim small amounts wherever they can.

I heard it described as you making a theatre booking for 4 seats, which seem to be available at $20 each. You place the order but only receive 2 of the seats because the other 2 got taken before your order was received. However another 2 seats on the other side are still available, but they now cost $25. The $20 to $25 mark up maybe exaggerated but it demonstrates the principle.

The other day I placed an order for 5000 shares in a particular company which seemed to be available at my price, but on placing the order I only received 200 shares with 4800 outstanding. If I don't lift my bid price I face the prospect of paying the same minimum brokerage on 200 shares as I would have on 5000 shares. As I said I may have been unlucky and the market moved but this seems to be happening a little too often to be coincidental.

The Michael Lewis story hit a chord with me. Distrust in the market cannot be a good thing and I think the Federal government may be looking at this issue at the moment. Remains to be seen if they do anything about it.