Tag: stock

The Average Stock Is Held For 22 Seconds! – The Logical Result of Computer Trading

On By southwerkIn Opinion
Michael Hudson

From Michael Hudson –

<em>Take any stock in the United States. The average time in which you hold a stock is–it’s gone up from 20 seconds to 22 seconds in the last year. Most trades are computerized. Most trades are short-term. The average foreign currency investment lasts–it’s up now to 30 seconds, up from 28 seconds last month.

What does that mean for you? If you are an actual human being you are competing, when you make a stock purchase, with a supercomputer, like the ones they use to analyze the weather. That is why the amount of time a stock is held is so low – computer trading.

It’s not a level playing field. A more apt comparison might be a gambling house where the table is rigged to favor the owner almost but not quite always every time. You have to have the occasional lucky winner whose stories will keep the others coming in.

An exaggeration?

Okay, how about this from 2009 –

With all of the scrutiny that high-frequency trading is now under in the media and in Congress, the New York Stock Exchange is probably none too thrilled that the Wall Street Journal has uncovered fresh details of NYSE’s giant new datacenter, which the exchange is building in a former New Jersey quarry. The new datacenter will significantly advance the amount of computer-automated trading that already dominates global markets, housing as it will “several football fields of cutting-edge computing equipment for hedge funds and other firms that engage in high-frequency trading,” according to the WSJ. So if you were recently shocked to learn that an estimated 70 percent of stock trading is just computers trading against one another, get ready for that number to go even higher.

Or this –

Fewer and fewer Wall Street traders are human beings. Instead, they’re computersthat execute trades in milliseconds (a millisecond is one thousandth of a second). A forerunner of today’s robotic trading, computerized program trading, was largely responsible for the stock market crash of October 19, 1987, when the Dow Jones industrial average plunged 22.6%.

 

This kind of computer trading or should I say, Algorithmic trading, isn’t going away. So if you are a mere mortal, you might find your ability to make money on stock a little constricted by non-human competitors.

James Pilant

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Not All Pirates Are in Somalia (via Off the Top o’ My Head)

On By southwerkIn business ethics1 Comment

This is some great writing. Many people are upset by the enormous salaries that CEO’s are pulling down and have conveyed their rage online. But few have explained the mechanics of the corporate system that make these salaries possible.

I visited “Off the Top o’ My Head.” I was impressed by the writing. This is a thoughtful author and he brings legal elements into his reasoning but not too much. The writing is very approachable. You should give this site a visit.

This is his business page.

James Pilant

General Electric Co. made news last month when it reported U.S. profits of $5.1 billion and worldwide profits of $14.2 billion, but paid no federal corporate income tax. GE even reaped a net tax benefit of $3.2 billion. What the newsies do not mention is that the government additionally subsidized the ridiculous wealth GE and other corporations lavish on their executives. Uncle Sam must miss a lot of sleep staying up nights to figure out how to p … Read More

via Off the Top o My Head

The Average Stock Is Held For 22 Seconds!

On By southwerkIn business ethics

Michael Hudson
From Michael Hudson –

<em>Take any stock in the United States. The average time in which you hold a stock is–it’s gone up from 20 seconds to 22 seconds in the last year. Most trades are computerized. Most trades are short-term. The average foreign currency investment lasts–it’s up now to 30 seconds, up from 28 seconds last month.