UNCTAD: High Frequency Trading and Speculation Leads to Higher Prices

Nicolas Maystre: Study shows relationship between food price volatility and high frequency trading

[ytgvfc]

agreed. That's why I don't trade on THEIR preferred time frame and I do trade options & leveraged ETF's without putting up my own margin. It reduces my risk while leaving their time-window hardly relevant. Plus profitable trade of options depends on any given days' preferred premium for the strike price on TOP of the price underlying being perhaps a bit off from what math/patterns or fundamentals/fraud/etc would have it. The HFT's can't control EVERY future.

[cosmosgato]

Lastly I really like TheRealNews, you guys are great, but we have to kept it on track :-)

[AirelonTrading]

Now ...

If those four videos that I posted as a response to this video are even used or allowed to be posted ...

And after THAT, if an intelligent response can be made AFTER consideration of those points ... I would welcome the interchange

THEY ARE NOT TRADING COMMODITIES

THEY ARE TRADING COMMODITY HEDGING MECHANSIMS

[cosmosgato]

Transparency yes is good but let's be clear "speculation" in the "futures" market is not the "initiator" of higher prices. A spike in demand or "hording" is the genesis of higher prices.
As for a trade tax remember the first rule is to do no further harm.
I'm neither a liberal or a conservative.
I believe in fairness, reason and objectivity that's it.

[slobot]

There are legitimate problems with HFT - particularly the price distortions caused by quote stuffing. But to allege that HFT causes price increases (but apparently not decreases) in food just illustrates the low quality of TRN's coverage of the markets. Computers that are in and out of positions in seconds and are flat at the end of each day don't have a substantial effect on pricing in either direction in a longer timeframe. Hoarding by longer-term players is different.

[AirelonTrading]

Better.

They never approved the videos I posted as reply to this video

Hedging mechanisms are the reason you have the PPICPI spread. It's the reasons that General Mills and Kellogs don't have to pass on as much of the price increase they experience to the rest of us

[LordOrlock]

Aaaaand... Does that make it better or worse?

[ytgvfc]

it can lead to lower prices too - hence flash-crashes

[Wrenchbenderi]

A friend of mine who is a commercial economist at a major bank put it to me this way. While computer based market trading itself is beneficial, buying and selling the same asset millions of times a day, making pennies on each sale, adding no value to it, is not beneficial.
This, in fact, is where inflation really comes from, not a Federal Reserve that adds money to an expanding economy to replace what is drained out by Wall Street and a growing population.

[cosmosgato]

Also the CHF rising against the Eur was based on fundamentals!
Would you keep billions in a currency that might not exist in a few years?

[Wrenchbenderi]

Another thing...
You can go to the store and buy a gallon of milk, and pay sales tax on it.
You can open your online trading account and buy $10 million in stock in your favorite food company...
and pay no tax on that. Let that sink in for a minute.

[ytgvfc]

except if that drives down the prices instead of up, then why do prices go up anyhow? Depends on the market, the need. The only incentive any seller has to put down the price is to keep the customers coming back. Low prices should not be a regular expectation, they should be the product of slumping from over-valuation or voluntary discount sales by owners (sellers). When you can't afford the food then the food will drop - unless others CAN afford it then you are out of luck.

[slobot]

That paper is about very short-term correlations between commodities (particularly oil) and the S&P 500 that began to exist after electronic futures became fungible with pit futures around 2006/7 and volumes exploded. This is undoubtedly related to algorithmic trading, but has absolutely nothing to do with what I just said.

But who needs to actually know about markets when you can just watch a video with so-called experts that confirm your existing bias?

[xerxes]

Very good video, well done.
Just stop saying I Mean!

[LordOrlock]

Four gallons of Milk: 7% sales tax amounting to 28 cents.

10 million stock in Chiquita: No tax.

So, I understand that taxes should be lower than stock. 7% tax on a stock would be ridiculous from an economic perspective. It would almost destroy the stock market because noone would make profit.

But for there to be NO tax a ALL is criminal. Make it .5% or something. Its large enough to create profit for government and hurt the investor, while not hurting the market or trading.

[sirellyn]

You know there's no way that prices rises has ANYTHING to do with expanding the Fed money supply. (Looks at the M1 stats) yeah no DIRECT CORRELATION at all.

We should blame something that's been going on strong for a decade instead. Yep, that has to be it. Hope they don't notice less than a month after QE is announced prices until QE is over.

It's the traders! Using that free QE money that the banks will never spend to increase inflation!

[KAngeliii]

"Computer-based market trading 'beneficial'" reads the header of a BBC article:
Dear RNN, why not interview someone who thinks it is a great idea so we can hear other views? (I'm not saying good or bad, but just like to see more on the RNN)

[cosmosgato]

An understandable but incorrect analogy.
A trader is not a customer but the owner of a business.
The owner of the grocery store that sold the milk pays tax on the profit of selling the milk not buying it.
The trader will pay tax on his profits too if there is any.

[heckler]

But I mean, I mean... uhhh I mean... what I mean uhhh...