Pharaoh
Brigadier General
- Messages
- 20,310
Too bad the platforms don't show these to the second. From the variations of price on opening trades within a 1 minute window, it's obvious that there was some volatility involved - which presents opportunities for spike trading and can result in slippage, off-quotes, and off-market fills.
I would think that it would be very hard to tell spike news trading from arbitrage around news time, since the window of opportunity for each would be only a few seconds long.
The same could be said for manually trading a speech. I was one of a lot of people who clicked and made money when Trichet once said "heightened alertedness" during a speech. Price moved suddenly, and those people who reacted a fraction of a second slower than I did could have their orders filled off-market at the same time as those allegedly looking to take unfair advantage of price lags.
Under those circumstances, how can anyone tell the difference in the tidal wave of inbound orders around a speech or news spike because of a big deviation are from "good" news traders vs. "evil" arbitrage traders using software spotting the lag between two different price feeds?
I would think the hallmark of anyone truly abusing a broker by using arbitrage software would be quick, high leverage trades that only make a handful of pips, most or all of which are due to the off-market nature of the entry price. Yes, some of these would be around news events, but any sort of illiquid time could provide these opportunities. Why limit oneself to news when "guaranteed arbitrage profits" can happen at other times? Why leave an "arbitraged" trade open when the market could reverse?
I'm still waiting for the AvaTrades rep to answer my questions about the number of orders in each category. I have the feeling that those numbers don't support the theory of any of these trades really being anything more than a news trade with an off-market fill.
I would think that it would be very hard to tell spike news trading from arbitrage around news time, since the window of opportunity for each would be only a few seconds long.
The same could be said for manually trading a speech. I was one of a lot of people who clicked and made money when Trichet once said "heightened alertedness" during a speech. Price moved suddenly, and those people who reacted a fraction of a second slower than I did could have their orders filled off-market at the same time as those allegedly looking to take unfair advantage of price lags.
Under those circumstances, how can anyone tell the difference in the tidal wave of inbound orders around a speech or news spike because of a big deviation are from "good" news traders vs. "evil" arbitrage traders using software spotting the lag between two different price feeds?
I would think the hallmark of anyone truly abusing a broker by using arbitrage software would be quick, high leverage trades that only make a handful of pips, most or all of which are due to the off-market nature of the entry price. Yes, some of these would be around news events, but any sort of illiquid time could provide these opportunities. Why limit oneself to news when "guaranteed arbitrage profits" can happen at other times? Why leave an "arbitraged" trade open when the market could reverse?
I'm still waiting for the AvaTrades rep to answer my questions about the number of orders in each category. I have the feeling that those numbers don't support the theory of any of these trades really being anything more than a news trade with an off-market fill.