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The Trading Mesh

Fidessa's Blog

Maybe markets are unfair, but are they rigged?

April 2, 2014 Comments (0)           

This article was originally published at the Fidessa blog, and is reproduced here with permission. By Steve Grob
The publication of Michael Lewis’s new book Flash Boys has reignited the whole HFT/dark pool debate (actually, maybe it’s never really gone away). The point people seem to continually miss in this debate is the distinction between “unfair” and “rigged”.
To me the term rigged implies some malevolent conspiracy between...

The Twilight Zone

February 6, 2014 Comments (0)           

This article was originally published at the Fidessa blog, and is reproduced here with permission. By Steve Grob
I came across the term ‘Twilight Pool’ for the first time this week. The basic idea is that it is essentially a dark pool that lights up certain pieces of information, or at certain times, in order to provide users with some idea of what is or isn’t lurking there. The advantage is that it enables participants to see if the type of liquidity...

The Watchman’s Rattle – financial regulation in 2014

January 23, 2014 Comments (0)           

This article was originally published at the Fidessa blog, and is reproduced here with permission. By Steve Grob
In her excellent book, ‘The Watchman’s Rattle’, Rebecca Costa explains the tendency to substitute belief for science when problems become too complicated. The first sign of this is a cognitive threshold, or gridlock, where problems are just passed down from one generation to another with an increasing emphasis on treating short-term symptoms rather...

Dumb and dumberer?

October 22, 2013 Comments (0)           

 
This article was originally published at the Fidessa blog, and is reproduced here with permission.
 
By Steve Grob

Not surprisingly, the recent political elections in Germany have brought the question of financial transaction tax (FTT) back to the fore. Basically, the Social Democrats (SPD) are making it a condition of participation in a European banking union. The reason for this, they claim, is that: “For the SPD, it’s important that taxpayers in the...

The dark gets darker

October 17, 2013 Comments (0)           

In the past 6 months, European dark pool trading has grown by 45% compared to the same period last year, and yet the universe of stocks traded in the dark has only grown by 2%. Read the full analysis in our latest report.

Where theres muck theres brass

September 3, 2013 Comments (0)           

 
This article was originally published at the Fidessa blog, and is reproduced here with permission.
 
By Steve Grob

I don’t venture to the north of England often, but I do have a work colleague who hails from Yorkshire – the origin of the phrase “where there’s muck there’s brass”. Its basic meaning is that there is often good money to be made from doing the dirty jobs, and it seems like this is particularly true of global financial...

Why the big exchanges need to visit Amsterdam

August 21, 2013 Comments (0)           

My friend Nandini Sukamar at Bloomberg broke a story yesterday that Eurex is to compete with CME Europe by offering competitive FX contracts. So it looks like we are going to see a few more spats as the big boys vie for control over the European exchange-traded derivatives market. The CME is looking to launch its own competitive products to Eurex, and NASDAQ NLX is taking on both NYSE Liffe and Eurex with its own interest rate products. These are interesting developments, as history shows that...

FTTs and ET a dangerous combination

August 8, 2013 Comments (0)           

 
This article was originally published at the Fidessa Fragmentation blog, and is reproduced here with permission.
 
By Steve Grob
There has been a lot of talk recently about the introduction of Financial Transaction Taxes (FTTs). This has even extended to speculation here in the UK that we should tax those naughty HFT practitioners too. Seemingly everyone has a view on this and whether such taxes actually punish the banking community or the end investor. But the...

Not even wrong

July 26, 2013 Comments (0)           

 
This article was originally published at the Fidessa Fragmentation blog, and is reproduced here with permission.
 
By Steve Grob
Gently easing my way back into the daily grind after my annual vacation I came across the report that MPs in London are proposing to tax HFT. They must have been drinking more sangria than I have over the past few weeks. For a start, any tax aimed at changing behaviour needs to be very clear about what behaviour it is targeting and the...

Wheres my TV remote?

June 13, 2013 Comments (0)           

The recently proposed cap on European dark trading has caused quite a stir. It also illustrates how MiFID II policy-making has descended into almost Eurovision song contest levels of farce. The basic idea is to put a cap (currently proposed at 8%) on the level of trading that occurs away from lit markets. The rationale for this is to protect the regulator’s precious price formation process and so it sensibly excludes large block orders that wouldnt have traded on an exchange anyway. But...