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70% Of All Stock Market Trades Are Held for An Average of 11 SECONDS

Posted By admin On October 23, 2010 @ 3:46 am In Commentary | Comments Disabled

Washington’s Blog
Oct 23, 2010 

The Fourteenth Banker writes [1] today:

In the stock market, program trading dominates volume. I heard recently that 70% of trade positions are held for an average of 11 seconds.

He’s correct.

As the New York Times dealbook noted [2] in May:

These are short-term bets. Very short. The founder of Tradebot, in Kansas City, Mo., told students in 2008 that his firm typically held stocks for 11 seconds. Tradebot, one of the biggest high-frequency traders around, had not had a losing day in four years, he said

 

Similarly, FT’s Martin Wheatley pointed out [3] last month:

I know of one HFT firm operated out of the west coast of the US that boasts its average holding period for US equities is 11 seconds

 

And market analyst Peter Cohan writes [4] at AOL’s Daily Finance:

70% of trading volume on the major exchanges is conducted by high-frequency traders who hold a stock for an average of 11 seconds [5].

 

The fact that the vast majority of stock market trades are held for 11 seconds shows that the stock market is not a real market with real traders governed by the law of supply and demand, and that there is no real price discovery.

But as Tyler Durden points out [6], alot can happen in 11 seconds when the players are high-powered computers:
 

07-29-10
BATS “Flag Repeater”. 15,000 quotes in 11 seconds, dropping the ASK price 1 penny each quote from $9.36 to $8.58 and back up again.

70% Of All Stock Market Trades Are Held for An Average of 11 SECONDS 1%201%20Nanex 0 [7]

Having A Supply Of Healthy Foods That Last Just Makes Sense (AD) [8]

70% Of All Stock Market Trades Are Held for An Average of 11 SECONDS 240810banner2 [9]


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URLs in this post:

[1] writes: http://thefourteenthbanker.wordpress.com/2010/10/22/seeking-radical-solutions/

[2] noted: http://dealbook.blogs.nytimes.com/2010/05/17/speedy-new-traders-make-waves-far-from-wall-st/

[3] pointed out: http://www.ft.com/cms/s/0/ad7f31f6-c4cd-11df-9134-00144feab49a.html

[4] writes: http://www.dailyfinance.com/story/investing-basics/what-you-shouldnt-buy-in-the-investment-market-the-pundits-ad/19670374/

[5] 11 seconds: http://marketplace.publicradio.org/display/web/2010/05/31/pm-why-we-dont-know-reason-dow-dropped-q/

[6] points out: http://www.zerohedge.com/article/its-not-market-its-hft-crop-circle-crime-scene-further-evidence-quote-stuffing-manipulation-?page=1

[7] Image: http://www.zerohedge.com/sites/default/files/images/user5/imageroot/trichet/1%201%20Nanex.png

[8] Having A Supply Of Healthy Foods That Last Just Makes Sense (AD): http://www.efoodsdirect.com//index.html?aid=14&adid=43

[9] Image: http://www.infowarsshop.com/United-We-Fall_p_339.html

[10] 84% of All Stock Trades Are By High-Frequency Computers … Only 16% Are Done By Human Traders: http://www.prisonplanet.com/84-of-all-stock-trades-are-by-high-frequency-computers-%e2%80%a6-only-16-are-done-by-human-traders.html

[11] Even the Little Guy Now Realizes that the Stock Market is Gamed, And Many Are Pulling Out Entirely: http://www.prisonplanet.com/even-the-little-guy-now-realizes-that-the-stock-market-is-gamed-and-many-are-pulling-out-entirely.html

[12] Average US Family Lost $21K in 6 Months Due To Property Values, Stock Market: http://www.prisonplanet.com/average-us-family-lost-21k-in-6-months-due-to-property-values-stock-market.html

[13] Corporate Media Spotlights Distortion of Market by High Frequency Trading: http://www.prisonplanet.com/corporate-media-spotlights-distortion-of-market-by-high-frequency-trading.html

[14] Repeal of the Uptick Rule: A Planned Program to Obliterate the Stock Market: http://www.prisonplanet.com/repeal-of-the-uptick-rule-a-planned-program-to-obliterate-the-stock-market.html

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