http://blogs.reuters.com/reuters-dealzone/2009/07/13/all-quiet-at-the-aleynikov-mcmansion/comment-page-0/#comment-344015

Facebook: Sergey Aleynikov Fan Club : http://flq.us/wg

Financial Times, wow.

a website called ZeroHedge has been tracking GS’s program trading at the NYSE for several months. They have noted several very strange patterns involving GS’s trading. From the work done there, the SEC has begun preliminary investigations into GS’s trading influencing the movement of the NYSE. Trading on the market has been down since last October. GS’s portion of Program Trading has been increasing since December to where (until last week when NYSE change reporting rules) GS accounted for over 60% of all the Program Trading done at the NYSE. The closest competitor is Merril Lynch at 1/3 of GS…..The extent of Serge’s involvement is unknown. It is worthy to note that as soon as he left, GS went to the FBI to say that code had been taken and this code can be (not COULD BE, but CAN BE) used to manipulate the market…..

If you want to know how fast trading is these days it about 5 milliseconds, and check out the Direct Market Access(DMA)platforms.

And for the tinfoil hat wearing crowd, just because some trading programs are faster than you does not mean the banks are front running anybody. Technology provides equal opportunity to anyone even in some cases the common retail investor, it is not like the days of old when the Big Board $2 brokers would manipulate the paper system. There are literally thousands of algorithms at thousands of firms competing against each other on both the buy and sell side.

Also most of the Big banks themselves are now giant hedge funds. It wasn’t always that way. The program trading does push the markets around no question about it.

If you want to learn more start here.

http://www.automatedtrader.net

There are a few things to take into consideration here. The first is the overall trading volume on the exchanges is down. The level of automated trading will show show up as a big number because program trading by its nature will throw up a lot of trades. All those S&P500 funds will be trading almost every stock stock under it. So instead of generating one trade, you are generating 500 trades. Now multiply that across the banks client base. All those pension funds and university endowments, chasing yield and growth.

To give a real world example, we have BASF. They announce layoffs and the price drops. While the bank will moving its position in its german subsidiary, it will be booking some client trades through ADR’s and the bigger clients will have to book trades against the american book to meet 15a6 reporting requirements. In reality, the bank has to make one trade, to cover the position, but on the back end it will generate several thousand trades, to balance the books.

As for the banks putting routers in exchanges, there are a few bucks to be made off arbitrage moves in the market, but banks are looking more for instant execution. They don’t want a price to move as the order is executed.

At the end of the day, the only real story here is the trade secrets case. IF GS has been using Linux and Open Source Linux and associated products then this guy has a defense. This could be the IB version of Metallica vs Napster, except this time Naptster wins.

ya gotta wait till the fall.

:)
SAS

ben: I’ve said it more than once….the Russian business guys a the biggest bastards of all time. Moral compass? The scumbags make investment bankers look like Peace Corp volunteers.

mug shot for the ages!
http://news.yahoo.com/s/ap/20090707/ap_on_en_tv/us_people_joyce_dewitt

I saw a house I like in Bergen. I’m thinking about maken a move to buy for a relative of Juanita.

Its brick & frame. what you all think of brick & frame?

SAS

Ya gotta show up to have us buy you one…:)

sl

someone should be buying me the first round by now.

SAS