Stocks & Commodities V. 31:3 (27): Q&A by Don Bright
Product Description
Q&A by Don Bright
ARE CHANGES DOING US GOOD?
Mr. Bright, first of all, I want to thank you for your assistance in the past. You have been kind enough to send back email responses personally, and I read your column in Stocks & Commodities every month.
There have been so many changes in the markets over the last few years, some good, some not so. I am looking forward to a new year of trading and was hoping you could help me with a few issues. Perhaps either give me some solace, or send me in another direction. Thank you in advance:
1. Fear or fantasy. Subpennies and highfrequency trading (HFT). You’ve written about both, but I would love to hear your opinion about them for 2013.
2. Strategies. You’ve spoken highly about opening-only plays, pairs trading, market on close (MOC) imbalances, and basic market making. How are traders making these things work? And is there anything new in the Bright Trading group?
3. Market centers. I’ve been told there are dozens more market centers than I can see on my screen. Can you tell me if there are any edges that can be derived from these locations? How many do your people use?
—Chicagotrademan
Good questions. I’m going to defer, once again, to Dennis Dick, a top Bright trader and CFA, for the first question:
“Adjusting your trading style for the HFT toll: the one thing that high-frequency trading has done is monopolized the top of the order queue. That means the high-frequency traders are always the first to get filled at any pricing increment. They have various tools that allow them to get to the top of the queue, whether through the use of subpennies, order types, or speed.
ARE CHANGES DOING US GOOD?
Mr. Bright, first of all, I want to thank you for your assistance in the past. You have been kind enough to send back email responses personally, and I read your column in Stocks & Commodities every month.
There have been so many changes in the markets over the last few years, some good, some not so. I am looking forward to a new year of trading and was hoping you could help me with a few issues. Perhaps either give me some solace, or send me in another direction. Thank you in advance:
1. Fear or fantasy. Subpennies and highfrequency trading (HFT). You’ve written about both, but I would love to hear your opinion about them for 2013.
2. Strategies. You’ve spoken highly about opening-only plays, pairs trading, market on close (MOC) imbalances, and basic market making. How are traders making these things work? And is there anything new in the Bright Trading group?
3. Market centers. I’ve been told there are dozens more market centers than I can see on my screen. Can you tell me if there are any edges that can be derived from these locations? How many do your people use?
—Chicagotrademan
Good questions. I’m going to defer, once again, to Dennis Dick, a top Bright trader and CFA, for the first question:
“Adjusting your trading style for the HFT toll: the one thing that high-frequency trading has done is monopolized the top of the order queue. That means the high-frequency traders are always the first to get filled at any pricing increment. They have various tools that allow them to get to the top of the queue, whether through the use of subpennies, order types, or speed.
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