Tag Archives: CFTC

Ex CFTC regulator rejects Flash Boy source code law

Ex CFTC regulator rejects Flash Boy source code law

Of course, this would only work under super nanny states

From Bloomberg, Aug 1, 2016, 4:35:51 PM

A former commissioner for the main U.S. overseer of derivatives said the agency should abandon controversial regulatory measures for high-speed traders until Hillary Clinton or Donald Trump is elected.

To read the entire article, go to http://bloom.bg/2aKIwqD

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Use CFTC for historical futures data and open interest commitment of trading

Use CFTC for historical futures data and open interest commitment of trading

I came across this site for my futures/options/FX trading strategy algos. This may be useful for some especially the weekly open interest component

http://www.cftc.gov/MarketReports/CommitmentsofTraders/HistoricalCompressed/index.htm

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CFTC too broke to crack down on flash trading

CFTC too broke to crack down on flash trading

From Bloomberg, Feb 10, 2016, 5:15:57 PM

The top U.S. derivatives regulator said his agency needs more money to keep up with the Flash Boys.

To read the entire article, go to http://bloom.bg/1O3s6zC

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CFTC Rule on Automated Trading

CFTC Unanimously Approves Proposed Rule on Automated Trading

This will be a uh oh for us little automated traders

http://www.cftc.gov/PressRoom/PressReleases/pr7283-15#PRBoxR1

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Download CFTC futures options data

Download CFTC futures options data

Don’t just sit there and download right now

http://www.cftc.gov/oce/web/data.htm
http://www.cftc.gov/MarketReports/CommitmentsofTraders/HistoricalCompressed/index.htm
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CFTC execs says front running legal

CFTC execs says front running legal

Oh shock! It is legal according to this exec from the CFTC

“The big game in this hunt became known as a whale-an order from a leviathan fund company such as Fidelity, Vanguard, or Legg Mason. If the algos could detect the whales, they could then have a very good sense for whether a stock was going to rise or fall in the next few minutes or even seconds. They could either trade ahead of it or get out of its way. The bottom line: Mom and Pop’s retirement accounts were full of mutual funds handing over billions of dollars a year to the Bots.”

 

http://www.tradersmagazine.com/news/viewpoints/are-pinging-and-front-running-legal-one-cftc-exec-says-no-113471-1.html

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Regulation on your trading systems and its signals? NFA and CFTC

Regulation on your trading systems and its signals? NFA and CFTC

America the free. Regulated to death.

055 – NFA BYLAW 1101, COMPLIANCE RULES 2-9 AND 2-29: GUIDELINES RELATING TO THE REGISTRATION OF THIRD-PARTY TRADING SYSTEM DEVELOPERS AND THE RESPONSIBILITY OF NFA MEMBERS FOR PROMOTIONAL MATERIAL THAT PROMOTES THIRD-PARTY TRADING SYSTEM DEVELOPERS AND THEIR TRADING SYSTEMS

http://imarketslive.com/fru/pg/39796/pmid/12450/print/1/frmmh/1/default.aspx

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CFTC Commissioner Bart Chilton proposes the new regulations he wants to see for HFT or high frequency trading within America

CFTC Commissioner Bart Chilton has completed his speech on the new regulations he wants to see for HFT or high frequency trading within America

Here is what he proposes today according to a Bloomberg TV interview he just did:

Current 140K penalty for when your algo but now new proposal for each violation will $140k per second. Now there is a push for jail time. Senator Bart Chilton (CFTC Commissioner) claims millions are paid in seconds. He wants a kill switch as well. CTFC. Use a wash blocker technology for US markets but used in Europe as they make money from the money maker on the exchanges.

HFT does provide liquidity but only make money for a few seconds. Europe took action to slow them down to a half second each trade.

Dodd Frank does not metion HFT as he expects another flash crash. He calls them endangered cheater traders.

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CFTC’s O’Malia plans test to define HFT

CFTC’s O’Malia plans test to define HFT

“…the CFTC must develop a precise and reasoned definition of who is and who is not an HFT.”

 

Commissioner proposes definitions for industry

 

My 2 cents. HFT’s are traders who submit and cancel orders in response to changes in the state of the order book. They could be responding to changes in a different market or for a different product. But the defining characteristic is that profitability depends on being the first to respond to a particular change in the order book state.

 

Your definition captures the spirit of HFT very well. The challenge for US lawmakers is to define HFT in rules. Scott O’Malia’s current attempt (according to the FT) is below.

• The use of extraordinarily high-speed order submission/cancellation/modification systems with speeds in excess of five milliseconds or generally very close to minimal latency of a trade;

•The use of computer programmes or algorithms for automated decision-making where order initiation, generating, routing, and executionare determined by the system without human direction for each individual trade or order;

•The use of co-location services, direct market access, or individual data feeds offered by exchanges and others to minimise network and other types of latencies;

•Very short time-frames for establishing and liquidating positions;

•High daily portfolio turnover and/or a high order-to-trade ratio intraday;

•The submission of numerous orders that are cancelled immediately or within milliseconds after submission;

•Ending the trading day in as close to a flat position as possible (not carrying significant, unhedged positions overnight).

 

the second bullet can be used to describe me as a swing trader that carries positions over night, I also use hosting servers near the exchange, but my time limit is on the minute levels. I am about as far away from the HFT as anyone is. But #2 does have me concerned that my business would be regulated out of existence.

 

If you only satisfy 1 out of 7 criteria then hopefully you will fall safely out of the HFT net. http://www.ft.com/cms/s/946cfc22-0f89-11e1-88cc-00144feabdc0,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F946cfc22-0f89-11e1-88cc-00144feabdc0.html&_i_referer=http%3A%2F%2Frereferyned#axzz1e4OeA6YKBottom of Form

 

 

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