Did High Frequency Trading (HFT) firms win on Avon

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• Did High Frequency Trading (HFT) firms win on
  Avon

• High Frequency trading
• gets bad rap
• Author Hari Swaminathan

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• In case you missed this, last week, there was
  apparently a buyout offer for Avon Products by an
  unrecognized private equity player from the
  UK. Shares shot up beginning around 1135 a.m.
  and twenty times as many shares as usual changed
  hands in 25 minutes as the stock went from 6.60
  to 8. But HFT firms were unlikely to be on the
  winning side, Bloomberg reports here.
•  
• High frequency trading computers probably cant
  distinguish between an orderly market, and one
  where sudden spikes are cause by some news that
  can only interpreted by humans. Seeing the order
  flow come in probably triggered several high
  frequency firms computers to step in and buy.
  But when does it sell ? Most of these firms
  probably have hard profit targets when their
  computer algorithms kick in again to sell. So in
  all likelihood, the High Frequency trading
  computers got in, and then got out perhaps too
  early, thereby leaving a ton of money on the
  table. 

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• But once again, the mighty U.S. stock markets
  proved vulnerable to manipulation. And it comes
  right after the indictment of Navinder Singh
  Sarao in the UK, who is allegedly responsible for
  creating the feared May 10, 2010 Flash Crash.
  Seriously, one person can do this ??? 
• What amazes me is that whenever there is any
  kind of vulnerability exposed in the market, and
  even though the powers-that-be have no clue what
  just happened, media and the general public dont
  wait a nanosecond to point the finger at High
  Frequency trading firms. The Flash Boys are
  indeed the Whipping Boys of the markets.
• Heres a more typical High Frequency trading
  play, and this post was written sometime in early
  2014 when High Frequency firms were clearly
  expecting a move from the ISM number, and their
  computers were ready to cash in. The graphs are
  fascinating, and we get a very deep look into the
  nano-world of High Frequency trading.

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• High Frequency Trading (HFT) action on ISM
• There was an article on Zerohedge yesterday
  on High Frequency Trading (HFT) sample. You can
  read the complete post here 
• Please click the images for larger sizes (Images
  credit Zerohedge / Nanex). 
• Summary of key points
• - Yesterdays ISM numbers were supposed to be
  released at 10 am ET
• - Some HFT firms apparently got the information
  15 milliseconds earlier and executed large orders
  on the SPY (at 95959.985 am)
• - Similar activity can be noticed on the
  ES Futures 8 milliseconds prior to 10 am
  (95959.992 am)
• - Why the difference in 7 milliseconds ? The ISM
  number is released in NYC, and the E-minis are
  traded in Chicago. Thats how long it takes (7
  milliseconds speed of light to travel from NYC
  to Chicago) for the data to travel from NYC to
  Chicago.

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• My question is does this kind of trading
  affect average people at all ? Let these guys
  spend a gazillion dollars on superfast computers
  and fight for first place in a race thats
  entirely between themselves. Average investors
  are not fighting for this edge. Im not an expert
  on HFT, but it seems like this fight is
  completely HFT vs HFT, much like big-city rival
  gangs. Or am i missing something ? Please weigh
  in if you are knowledgeable in this area. 
• Regardless, its a fascinating look at how High
  frequency trading sample works in the markets.
  The article seems to suggest that there could be
  hanky-panky involved in the fact that this data
  was available to certain players ahead of time.
  Yes, this is definitely a problem if it is true.
  But whose clocks are they going by ? Whats to
  say that the data itself was not released 15
  milliseconds earlier than 10 am sharp ). Im
  just amazed to see that transactions are being
  recorded and documented at the millisecond level.
  Both charts below show SPY and ES trading volumes
  at the millisecond level for different exchanges.
  Check out these awesome charts..Both charts show
  volume in a span of 150 milliseconds, which is
  just 15 of 1 second.

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