Thursday, 1 July 2010

Sometimes Algos Are Your Friend

I've been trying to stabilise this puny stock for the 3rd party account I trade. To my delight the moment I put in a 2x usual size bid, an algo lifted the offer. So even though these coder wiz kids coding these algos are right in trying to front run your typical aggressive buyer, it can backfire when someones bluffing. I like bluffing.

So the best thing to do if you want to sell is actually bid like a world champion and sell to the front runners or order depth gamblers.

It's also interesting to see what happens when you lift 4-5 offers of a algos "market making" and see it immediately switch side, sometimes bidding higher than last sale...

Algos aren't good market makers, they're front runners. And they're good at it!

Is this ethical? You fucking bet! ;)

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