JPM Reports Perfect Trading Quarter, Makes $112 Million In Average Daily Trading Revenue

Alexius12 at 01:20 2011-05-07 said:

That is easy. It's called computerized front running. The latest tool and ultimate trade rigger for the people we just bailed out under the oversight of Fed Cartel which regulates how much an LO can now make. Banks can steal over $100 Million a day, you cannot make more than a few lousy thousands, if you are very lucky.

I met Jamie Dimon in person about a month ago in a location that I cannot divulge. He boasted how JP Morgan has a huge room somewhere in Florida where they process all credit card transactions and trading in the $2-3 Trillion per day. Yes, per day.

He explained how you can see the trading and ACH move from one side of the room to the other through huge screens on $9.99 billion dollar packets as he described (I suppose the Fed Cartel has a maximum quote per minute for looting)

Also called High Frequency Trading (HFT) or “black box trading,” automated program trading uses high-speed computers governed by complex algorithms (instructions to the computer) to analyze data and transact orders in massive quantities at very high speeds. Like the poker player peeking in a mirror to see his opponent’s cards, HFT allows the program trader to peek at major incoming orders and jump in front of them to skim profits off the top. Note that these large institutional orders are our money — our pension funds, mutual funds, and 401Ks

“Let’s say that there is a buyer willing to buy 100,000 shares of BRCM with a limit price of $26.40. That is, the buyer will accept any price up to $26.40. But the market at this particular moment in time is at $26.10, or thirty cents lower. “So the computers, having detected via their ‘flash orders’ (which ought to be illegal) that there is a desire for Broadcom shares, start to issue tiny (typically 100 share lots) ‘immediate or cancel’ orders – IOCs – to sell at $26.20. If that order is ‘eaten’ the computer then issues an order at $26.25, then $26.30, then $26.35, then $26.40. When it tries $26.45 it gets no bite and the order is immediately canceled. “Now the flush of supply comes at, big coincidence, $26.39, and the claim is made that the market has become ‘more efficient.’ “Nonsense; there was no ‘real seller’ at any of these prices! This pattern of offering was intended to do one and only one thing — manipulate the market by discovering what is supposed to be a hidden piece of information — the other side’s limit price! “With normal order queues and flows the person with the limit order would see the offer at $26.20 and might drop his limit. But the computers are so fast that unless you own one of the same speed you have no chance to do this — your order is immediately ‘raped’ at the full limit price! . . . [Y]ou got screwed for 29 cents per share which was quite literally stolen by the HFT firms that probed your book before you could detect the activity, determined your maximum price, and then sold to you as close to your maximum price as was possible.”

Goldman Sachs earned at least $100 million per day from its trading division, day after day, on 116 out of 194 trading days through the end of September 2009. It’s like taking candy from a baby, when you can see the other players’ cards. Permalink