It is hard to comment on the accuracy of this article about Zero Hedge.
The article suggests that ‘the blogger’ was the first to spot and identify what has come to be known as HFT – High Frequency Trading. HTF is so fast, it can front run every trade, regardless of direction.
- If the trade is a buy, HFT can buy first, then sell at a fractional profit, prior to the client’s trade going through.
- If the trade is a sell, HFT can sell first, then buy at a fractional profit, prior to the client’s trade going through.
- If the trade is a short, HFT can sell short first, then buy back at a fractional profit, prior to the client’s trade going through.
It is also hard to say that HFT was or was not limited to client accounts…
It is possible that HFT was front running the entire stock market.
Anyway, ‘the blogger’ fingered Goldman Sachs for
using sophisticated, high-speed computers to siphon hundreds of millions of dollars in illegitimate trading profits from the New York Stock Exchange, invisibly undercutting the market and sidestepping the regulatory reach of the Securities and Exchange Commission.
There are perceptions of ‘the blogger’ either being fired or not hired, in the first place, regardless of his capabilities. Almost as if it were a personal matter…
By Joe Hagan
Published Sep 27, 2009
Last spring, in a far corner of the Internet, an unknown blogger began to piece together a conspiracy theory: