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One of the finer points made in the movie The Big Short andalso covered in the book Flash Boys by Michael Lewis were the inherent evils inthe use of HFT or High Frequency Trading. Details on HFT are hard to come by but it is generally accepted that HFTmachine trading makes up a good 50% of market volume if not more and that theaverage holding period is 11 seconds and may in fact be a good bitshorter.  HFT also features the practiceof “quote stuffing” or the illegitimate submission of orders designed to exposepricing irregularities and opportunities for profit.  Under existing exchange rules this practiceis almost certainly illegal yet it is allowed to flourish because once againthe banksters get to do whatever they want with impunity.  Enter IEX Group an off exchange organizationthat can process trades for institutional investors whilst discouraging HFTthrough the use of small quote delays on the order of 350 milliseconds,literally less than the blink of an eye. In the process of applying for Exchange Status its critics have labeledthe quote delay as providing “stale data” to its clients and that its businessmodel is “un-American” amongst other items. A more accurate description is that IEX strikes at the heart of thebankster lie, cheat and steal business model because it threatens to upset thestatus quo, frankly a status quo that very much needs to be upset, somethingthat is long overdue.

This is Caleb Lawrence Registered Investment Advisor ScottsValley Drive and Willis Road in the Scotts Valley Plaza, Suite 202 or call metoll free at 888-RICH PIG / 888-742-4744.

You can catch me on the radio at noon each business day aswell on California’s central coast.  KPIG107.5 FM in the Monterey Bay or KPYG 94.9 FM in San Luis Obispo.

Rebroadcasts, additional writings and other entries are alsoavailable on my Blog at www.clinvestments.com

Advisory services offered through Caleb Lawrence RegisteredInvestment Adviser Inc.


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