Bloomberg: AWESOME Heated HFT debate between IEX, Manoj Narang of Tradewerx and Michael Lewis of Flash Boys book about Goldman Sachs
This was AWESOME!! Sorry for the bad typing as this was typed up in real time:
IEX CEO (Brad Katsuyuma) on Bloomberg TV:
Started with phantom quotes on bid/ask spread was moved into electronic trading at RBC. It neutralizes HFT. Virtu and Goldman Sachs are buying into this. Was told he was pro. Some HFT threw him out.
Manoj Nerang of Tradewerx:
(did not look happy with IEX) Had issue with book from Michael Lewis. They could be provable false. HFT never trader against retail orders but internalized by wholesalers and execute for better pricing. (Sounded nervous)
BRAD: Mom and pop are impacted through pension funds. Legal vs moral dispute with Manoj (turned into agrument as Manoj got defensive). HFT get faster processed news feed (IQFeed is delayed by 3 ms) Price improvement vs stale price. It is not about fast vs slow where IEX slowly bump order for all participants. HFT will have an advantage.
Manoj: It will not do anything as the pricing is deterministic. Says IEX is a marketing gimmick. 7 person firm in 2007. He upgraded all telco and computers for faster improvement. Manoj claimed his company had more transactions vs Brad.
Brad: Manoj will speed up the data by 10x but claims it does not matter. He wants to educate people on this in the industry. Michaels explains it but IEX carries out the fair service. M
Mutual funds care about research not speed in microseconds. He said does not matter.
Manoj: Claims numbers are flawed. Since 1999-2007, volatility has gone from 80 to 65% during the hours of the market (he comes off arrogant)
Michael: He claims Brad would win the debate despite number stats. Brad will
Manoj: Speed does not matter. Flash crash will not happen due to regulation. He wants to improve the SIP (?) on exchanges. COnsolidated feed is SIP (best quotes from market centers for best pricing) DIrect feeds are faster where you get full depth of the market. The SIP is too slow based on antiquated technology due not to spending much money.
Goldman Sachs is fishy on how they jump onto IEX: (with former dark pool)
Brad: Started in 2013 with GS has been thoughtful. Insult to insult his operation with computerized firms like GS, Morgan Step, etc.
Michael: GS has internal argument on who argues to support IEX vs their dark pool. He says it is hard to know.
Manoj concluded with: The truth is in the numbers.
Manoj is clearly twisting things as he does not mention on how your orders are impacted at the wholesale broker level like Interactive Brokers, Think or Swim, etc. They still need to go through their prime brokers like a big bank.
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Here was another debate: (thanks to the newer NYC contact)
Here is that Blloomberg link (thanks to the NYC Contact)
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