1) Deals can always fall apart.
2) Shorting isn't free. It will costs money to borrow the stock. You have to borrow it for more than 6 months until the deal closes.
599 karma · joined December 30, 2010
2) Shorting isn't free. It will costs money to borrow the stock. You have to borrow it for more than 6 months until the deal closes.
> the dark pool operators make money from the HFT's not in terms of the commission, but in terms of collocating fees,
No. Dark pool don't really charge collocation fees. Barclays LX didn't. Most dark pools are in Weehawken and it's just a simple $500 cross-connect from your existing trading system.
> market data fees
It's a dark pool. There is no market data to charge a fee from.
> , and the right to be one of only a few HFTs allowed in the dark pool via collocating, ie exclusivity.
Not in the case of Barclays LX. They let every HFT in at very low rates which is the entire point of the article.
I agree. I don't think I'd be in the same place in my career today if I had a "working for free" attitude. Sometimes it was more hours and sometimes it was just a genuine curiosity about taking on challenges that are completely foreign to me.
Getting increases in comp is always a long-term game. There's no road map (i.e., work 2 more hours building this to get that experience which will increase my market value by X) and you'll go down a lot of wrong roads that will add zero to your market value. More importantly it requires delayed gratification. There can be a long delay between the work you put in and the payoff.
I think the biggest issue here is misaligned expectations between boss and worker. Personally, I've always gone into a job understanding what it was going to take to be successful. My comp expectations are adjusted accordingly. In trading bonds, which is nearly a 24 hour market, it does require >8 hours on the trading floor. At the end of the year my boss doesn't really care about my hours as long as our customers are happy and I've produced PnL.
> I hear those same arguments being used for HFT but honestly they don't really stack up (IMHO). <snip> It must be a challenge and I'm sure you can make a lot of money, which is fine, but it doesn't really contribute anything to the financial system.
These two statements stand in direct contrast. If you understand the role of market makers then you should understand that the most popular HFT strategy is to be an electronic market maker. It's about competition for liquidity provision which tightens spreads which reduce the cost of trading for everyone.
> 2. Not allowing investment banks to fail ("too big to fail" like Merrill Lynch). Bailouts of investment banks could reasonably be described as welfare for investment bankers;
This would have caused the collapse of the global economy. Google would have suffered mightily from the following depression. Companies like ML might "deserve" to be punished and that process is now working it's way through the courts, but that bailout cost a lot less than 25% unemployment.
> 3. Allowing banks to take positions as well as operate as market makers. There really should be strict separation here;
By it's very definition, a market maker must take proprietary positions.
> 5. Strict regulation on commodities market to separate speculators from hedgers. Driving up food prices causing untold misery even death should result in criminal liability for the organization and key personnel.
Hyperbole. There's never been any evidence that speculation on commodities is "driving up food prices" let alone causing "misery event death".
- Infrastructure is vital to most trades. Bonuses are going to more than 30% if you're on the cutting edge here - prop shops, some technology oriented hedge funds, and some banks.
- If by tools you mean GUIs then no.
- Engineers who write trading algos (or more likely algo components that are used by a trader at a higher level) will have a bonus that is more than 30%.
If you're working in the front office then your pay is going to be a multiple of a startup job. And it's going to be significantly higher then any established company in the area (Amazon, Facebook, Google). A good rule of thumb is your base will be similar what established companies pay and your bonus is all gravy.
Pressure and hours vary by firm. It's hard to generalize.
If it sounds like a circular argument to you then that's because economics involve systems of feedback. It's not as simple as A causes B. A has an effect on B which has effect on A. This isn't a very difficult concept that you needed to waste 4 paragraphs on.
It sounds like you're brought up with a more traditional expectation of constitutes a house - 2.3 kids, picket fence, et. all. That's depressing.
This is just false in NYC. Yellow cabs are 1/3-1/2 the price.
Or be happy with a life without children as a lot of us are.
Not that his point is valid, but he did say economic superpower and the USSR was certainly not.
https://www.google.com/search?q=japan+GDP
Adjusting for working age population shows a similar trend. And if data doesn't work for you then there's a ton of other signs that the economy is not doing well:
- Interest rates have been stuck against the zero lower bound
- Stock market is 1/4 of what it was at it's peak
- Property values have still not recovered in major cities
- Debt as a percentage of GDP has ballooned to over 200%
Now with that being said - if I had to choose a country to spend two lost decades in, it would be Japan. Local savers have allowed them to issue debt at very low interest rates which has been able to cover shortfalls. And there is signs that Abenomics is taking hold.
Nope, you don't get to redefine a return as only realized gains. This is a very liquid and can be sold at anytime. I can borrow against it in my portfolio to get a mortgage, can use it for margin, etc.
"But at some point, growing profits has to be a concern, too."
Not when the cash can be more smartly reinvested in growth. Facebook is above it's IPO price btw which means growth is in line with a year ago.
"Maybe the best way I can phrase it: Do you want to be Apple or Amazon?"
Apple's growth has completely stalled and they have no clue what to do with $100B+ in cash which is the reason for their massive stock price fall. Amazon knows exactly what to do with their cash and is piling it into growth. This is a far more efficient use of capital for an investor.
And I don't know what it means to "be Apple or Amazon" but I'd rather be an investor in Amazon - and so would most of Wall Street.
This is silly. Amazon has real revenue that is growing at a fantastic rate. Pets.com and it's ilk did not.
"when Amazon might finally give a return to its investors."
It has given a return to it's investors. Up 655% in the last 10 years and 17,000% since inception.