"Naked access gives trading firms, using brokers' licenses, unfetted access to stock markets. The firms, usually high-frequency traders, are then able to shave microseconds from the time it takes to trade."
NEW YORK (Reuters) - A report says that 38 percent of all U.S. stock trading is now done by firms that have "naked sponsored access" to markets, the controversial trading practice said to imperil the marketplace, and which faces a regulatory crackdown.
Naked access gives trading firms, using brokers' licenses, unfetted access to stock markets. The firms, usually high-frequency traders, are then able to shave microseconds from the time it takes to trade.
Aite Group, a Boston consultancy, found that naked access accounted for just 9 percent in 2005.
The U.S. Securities and Exchange Commission is set to make changes to naked access and less risky forms of so-called sponsored access, when it releases a document expected next month.
The document is also expected to look more generally at high-frequency trading -- where proprietary trading firms, brokers, and others use algorithms to make markets and profit from narrow market inefficiencies.
Sang Lee, managing partner specializing in market structure at Aite, wrote in the report that the industry now expects the SEC to adopt market-wide standards for monitoring sponsored access, and that it was likely naked access would be banned for non-broker-dealers.
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The stock market is no different than Vegas. Those who win blab about to everyone that will listen. Those who lose do not.
ReplyDeleteMany, many more losers than winners. Most winners are insiders and scammers or controllers like Goldman Sachs.
For the common man, go with PMs.
Naked capitalism is an ill-begotten friend.
ReplyDelete