Friday, August 28, 2009

Screwed

You won't be surprised that your home computer pales compared to systems honed by the Wall Street elite at places like Goldman Sachs, Citadel Investment Group and Renaissance Technologies. But you might be surprised at what they do with those systems to get an edge over you:
  • Scour the markets for opportunities and make millions of trades in less time than it takes you to hit the "enter" key.

  • Take advantage of exclusive "flash orders" to trade stocks at better prices than you'll ever see.

  • Fish for profitable stock bargains inside exclusive trading venues called "dark pools," where you'll never swim.

The scope of this activity might also surprise you. Over half of all trades are done by Wall Street insiders using quick-fire trading systems; 7% of all trading is done inside secretive dark pools. "The public is getting screwed here," says one hedge fund manager who follows these developments closely.