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SEBI's new algo trading norms 2016. what changes do you except?
I am reading this news article http://www.livemint.com/Money/VKmE9h...2016-Sebi.html about sebi's new norms on algorithmic trading. It seems they are going to curb down on HFT trading and algo tradings carried about by corportes and HNIs. But they are not talking much about retail traders and algo trading, Do they allow algo trading for retail traders?What are your opinion and views?
Thanks for sharing this information mutualguru
Since SEBI is still working on it and have not finalized any new norms yet. So we can use this thread to share progress of SEBI actions in this regards.
I am really shocked to see this part of the article -
Quote:
According to a 13 April Mint report, the share of HFT trading as a percentage of overall trading has been growing consistently. In 2011-12, HFT orders as a percentage of overall orders in the cash equity segment was at 65%.
This has gone up to 94% in 2015-16. HFT turnover as a percentage of overall turnover in the cash equity segment has gone up from 25% to 42% over the same period. In the equity derivatives segment, the percentage of HFT orders has gone up from 78% to 98% between fiscal 2012 and fiscal 2016
HFT orders contributing 98 % in the equity derivatives !
Although I am sure they would not be executing most of these orders, otherwise the whole game would become controlled by HFT. But still it means that they put a lot of orders in the order book for spoofing other traders or algos etc. which look at the order book for taking trade decisions. Just as our friend "timepass" has a tendency to keep an eye on the orderbook of his favorite stocks. Now he must know that HFT guys are trying to spoof him with fake orders in the order book.
Thanks and regards
Its not like this. Fake orders (Placing order and cancelling immediately) is prohibited everywhere. Western countries and in india as well. What HFT means they buy sell at very very low difference. Maybe 1 or 2 ask-bid spread. This is actually a very good thing. Else forget about good liquidity in markets and also slippage will be much much more.
HFT is required. Those are real orders, but many orders taking place.
Big portion of HFT is used for front running retail traders orders...Curb on HFT is right decision by SEBi and i support it..
What the heck..!!! I was 6.3K in profit at the time of clicking 'Exit' Button in one leg and cant believe what price I got today. Rs. -19k worth of slippage. I am experimenting with weekly banknifty options recently and didnt know MKT order will penalize me this much.
Is this coincidence or HFT players have seriously taken such news?
It will be very difficult to trade in such situations if happens to Nifty options too.
