Active Trader

In The Kitchen w/Haim Bodek & Sang Lucci Part 1

by on April 24, 2013

These days you’re starting to hear the words ‘market structure’ more often as traders & investors look for reasons to explain the price action in today’s market environment. Algorithms from high frequency traders, news desks, market making arms and order execution firms are ‘painting the tape’ now on a daily basis and retail traders find themselves further and further away from consistently profitable trades.

Just yesterday the S&P tanked almost 20 handles due to a false report claiming the White House was bombed & the President was hurt. The news was released from a hacked twitter account owned by none other than the Associated Press, a heavily syndicated news feed. A news algorithm took the markets down and right back up in a matter of seconds after the report was found without merit.

The structure of the markets has evolved into a landscape that few can understand. This series is meant to shine some light on what’s really going on behind the hundreds of server farms that house all the action in the equities markets. Haim Bodek, our resident algorithmic arms dealer, & Sang Lucci bring to you the first installment of a video series we hope to garner much attention in the trading community. Help us out by leaving your feedback below and sharing the video!

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  • Sang
    April 24, 2013 at 2:44 pm

    This is great! It’s sad that most of us are kept on the dark about all this stuff… Glad to see some folks trying to enlighten the majority of us who are retail traders… Keep up the good work, and looking forward to the upcoming videos!

    I wish the clip was a bit longer though, because it seemed like it got cut off…

  • Mustped Waddams
    April 30, 2013 at 5:43 pm

    Ha ha.. Haim the “arms dealer”… that has a nice ring to it.

    This was an good introduction and the right amount of length and content. The level of detail was just about right.

  • Kam
    May 2, 2013 at 2:35 am

    Most of us have direct access platforms with smart routing. I doubt many people here do daytrading with scottrade or TOS at a rate of 10$ a trade. That would be suicide. especially if they have only 25K or less Unless you hit 500% return on each trade and you get it right the first time etc… Haim needs to put himself in our shoes and tell us what happens specifically step by to our order. I look at chart I look at level 2 or total view, I look a times and sales although I was told by that most T&Ss trounce numbers and only show 5% of all trades as there is no way that if 70K trades happen in less than a sec its gonna show up correctly on T&S. T&S or what we call “the tape” can not follow up with microseconds trading. Think about it in 1 sec there is 1 M microseconds. in Oct 2010 the fastest trade was already recorded at 10 microseconds so in 1 sec there could be up to 100,000 trades or more…you really think T&S is gonna show everything? If Haim could break it down into words that a 14 yo can understand that would be great. If Haim could also let us know how we can get price improvement from understanding the whole architecture that would be even better! Thank you guys for the great work.

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