Quote:
Originally Posted by TwistedChief
Commodities markets are different in the way they’re structured, so you wouldn’t be subject to the same obviously bad behavior that the book chronicles in the equity market (which is pure thievery and pathetic in my view). But there absolutely are a lot of the same firms listed in that book (I happen work for one that touches tons of different things in financial markets and otherwise) who would be on the other side of a lot of your activity in grains by virtue of their role as market makers/liquidity providers. But I don’t think they’re taking advantage of you in such a brazen way.
Though I’ll give you an example of something that’s common to every futures market that can be thought of as a bit sketchy. If something is trading at 50.12/50.15 and there’s an average 10 on the bid and 10 on the offer and you have 100 to sell and offer them at 50.14, almost guaranteed the second you input your offer you’ll see a 50.13 offer show up right in front of you. If you cancel your order, that offer disappears. Put it back in and it populates again. And over and over again.
This is just the nature of ‘algos’ and how they operate in markets. It touches me as an institutional investor just as it would touch any retail investor.
And I focus primarily on interest rates so there was a fair bit in the book that was new to me as well. But the arms race for faster technology is something I’m well aware of and it’s absolutely fascinating.
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Yeah, it's worrisome. I sit on a board of a company that does autohedging of grain. I turned them onto it. I don't know what their risk is, but I wouldn't want to be autohedging with massive swings on the minute chart periodically. I'd be the guy that gets ****ed - EVERY TIME.