Category: Financial News

In this category, Latest Financial News visitors can find everything that Traders-Paradise finds it is related to the educational material existing here. As the name suggests it is news but ONLY related to Traders-Paradise’s tutorials, courses, guides about trading, and investing.

Here the readers can find posts and articles about recession and how to overcome it. Many trading or investing strategies are explained here. For example, why to use open interest strategy when investing, or growth stock investing strategy.
Here, our experts and journalist are taking examples from the real-life. it is usually breaking news, and use them to explain what is the best solution for traders and investors over a given time or related to the particular event.
Also in Latest Financial News readers can find an explanation of, for example, ratios useful to measure the particular market conditions.

Also, Traders-Paradise gives you some clues on how to react to changes in the markets, no matter if it is the stock market, the Forex market, or any other.
The main aim of the Latest Financial Market News is to connect the real events with the theory. Traders-Paradise uses real-life examples to explain the theoretical rules of investing and trading.
Also, when some breaking out news appear Traders-paradise will write about it but at the same time, the visitors will have a comprehensive analysis of what caused that event and how to overcome it.
Traders-Paradise hopes that this category will be very useful for its visitors and that they will find it helpful.

Bitcoin is ready for further increases

2 min read

The last month was very good for the crypto markets.

Bitcoin showed the ability to climb into the $5,000 area. There was no important selling pressure and that fact can encourage traders that have to expect BTC to see further gains in the near-future.

Just make comparison with Bitcoin’s last month close with the one seen in 2015, actually in October 2015. That was succeeded by a bull run.

This question was opened recently. A leading cryptocurrency trader revealed that eerie lines are shown today, the similar to 2014/2015 during the bear season.

Bitcoin approaches $5,400.

Today, 2 May, Bitcoin is trading under 1% at its prevailing price of $5,375.

But take a look at the time frame of one week.

Bitcoin has grown from its lows of $5,100.

And after really disturbing news.

What happened?

New York regulators shook the crypto world with the declaration that BitFinex, one of the leading crypto exchanges, had cheated investors.

The regulators claimed that Bitfinex employed its own “dollar-backed” stable coin, Tether, to mop $850 million in missing funds and put it under the carpet.

The news like this one caused great drops in Bitcoin’s value. But today, this crypto shows differently attitude.

After the news was published and widespread, BTC dropped a poor 10%. Moreover, it proceeds to escalate back towards its highs of over $5,600.

Besides, Bitcoin posted a green monthly candle. For many analysts it is bullish.

For example, DonAlt, a cryptocurrency analyst, tweeted about BTC’s monthly close.

And there were more very interesting events about Bitcoin in the past weeks.

For example, TD Ameritrade allowed BTC trading, also, eTrade added BTC and ETH. Oh, yes, Samsung is going to create its own token. And maybe the most important, the French government decided the banks have to support crypto.

So, the similarities between Bitcoin’s April of 2019 close and its October of 2015 close, are notably similar.

So, the conclusion can be that after April’s close will be followed by a massive bull run. But it would require a massive entrance of the money. Are we ready for that?

Only in that way, BTC’s price would hit $330k in the next few years said the analysts.

Bitcoin continues in an uptrend. So it is likely to rise towards the $5,500 level in the coming sessions, very soon.

According to newsbtc.com, in the past three sessions, there was a steady rise above $5,280 in bitcoin price against the US Dollar.

The BTC/USD pair reached traction above the $5,300 resistance.

It is above the 100 hourly moving average. The price went up over the $5,340 level and traded at $5,359.

A break above the $5,360 level may open the ways for a potentially the $5,400 level. The next main resistance is near the $5,450 level. That is a point where sellers may arrive. The prevailing price action is positive and, therefore it could be more gains above $5,360.

If a downside change appears, the bulls have to protect $5,280 or $5,250.

Well, it is almost impossible that the next bull run can be the same as in 2015.

But an entrance of money from corporations may be sufficient to feed the new parabolic upwards move.

That is what many investors are expecting.

BTC is at above $5,400 this morning. The consolidation continues.

Don’t waste your money!

risk disclosure

2nd May 2019
Does Intel Have Blues?

2 min read

The Big Blue’s quarterly earnings report is out, first after the appointment of new CEO, Bob Swan. Quarterly earnings for Q1 are slightly above the analysts’ expectations.

But the Intel is expecting 2019 yearly earnings to reach $69B, $2B below analysts’ projections. Also, Intel has announced the exit from the market for fifth-generation mobile phones modems, thus ceding that market to other competitors.

But not all is bad for Big Blue, as they have announced that the Sunny Cove 10-nanometer microarchitecture of processors will be launched by the end of this year, just three years later than it was originally planned.

With the news of the lower projected annual revenues came to the response from the markets and the Intel’s shares fell for around 9% from $57.61 on Thursday 25th April to $52.56. In following days that trend slowed down but continued and at the moment of this writing, Big Blues stocks are traded at $51.26.

With these price movements, Intel is certainly falling behind the rest of the S&P 500 tech companies, which have seen stock prices growing 24% on average over the previous year.

With that being said, the question is whether the Intel is in trouble and why?

The answer to that question is both yes and no, and the earnings report gives some clues. Intel’s main market is for the individual buyers of PC central processing units, and this is a market where the Big Blue dominates with 77% of all sales.

Many market analysts were warning for years now that this market is struggling and the sales numbers from Intel do agree.

Sales of the desktop and notebook CPUs are down 8% and 7% compared to Q1 2018 respectively.

But the average selling price (ASP) is up by 7% for desktop and 13% for notebook processors. Thus the Intel’s Client Computing Group has reported 4% growth of revenue compared to Q1 2018, and its $8.6B makes more than half of the Q1 2019 revenue.

Will this trend of growing ASP continue it is too early to say. But what is certain is that Intel will in coming months launch a new generation of CPUs. Manufactured on the much-maligned 10nm node, announced more than four years ago when the current 14nm node was launched, and just six months ago being dismissed as vaporware by some industry analytics, the code-named Sunny Cove is not promising sunny days for Intel.

Is the change of production node solution for Intel

The change of production node and decrease of the size of printed circuits of the CPU is supposed to bring much higher energy efficiency of the CPUs. But this decrease in size creates some serious production issues.

Namely, the smaller the printed circuits and gaps between various elements of them are the higher are chances for errors during manufacturing. And for the past three years, Intel was working on fixing these issues and increasing the yield of usable chips they produce.

According to some sources, Big Blue can be anything but happy with the yields at the moment. So, as it stands at the moment, Sunny Cove will be too little too late. And to add insult to injury even in this troubling PC market Intel is having problems to satisfy the demand from consumers for their CPUs as the yields of current 14nm generation are nothing to write home about.

Datacenter revenue is down 6%, compared to Q1 2018, to $4.9B, but this is to be expected as the data center and client computing are competitors to each other, especially in the sector of the enterprise and government buyers.

Big institutional buyers usually have to make a choice of either procuring large numbers of desktops or upgrading their data center capacities, and no one has expected that those two sectors continue growing together forever. Cloud computing revenue is up by 5% compared to Q1 2018, but that is too little to offset the decline of the enterprise revenues.

Though the Intel is absolute market share leader in their most important segment, desktop and notebook CPUs, 2019 is not looking rosy for the Big Blue.

Intel’s main competitor AMD has made huge strides

Their main competitor AMD has made huge strides in regaining the ground they have lost in the previous decade. At the moment they are offering products which have comparable performances but carry considerably lower price tag than Intel’s offering, especially in the high-end niche which has the highest profit margins.

Also, the recent announcements state that AMD is aiming for the launch of their 7nm Zen 2 architecture in mid-2019. AMD’s jump from 14nm to the 7nm production process, while skipping the 10nm step, promises 15% increase of performance and a 30% decrease of energy consumption. And this blow from AMD is going to shake the Intel much worse than the scandal surrounding fake demo CPUs at Computex 2018.

The accountants and suits at the Big Blue know that AMD’s Zen 2 is more than competitive to anything they have in offer, and thus they are projecting lower annual revenues for 2019 than the analysts.

Don’t waste your money!

risk disclosure

30th April 2019
Twitter is implementing the new tool

1 min read

Twitter will launch a new tool for users. The aim of this new tool is to protect users from deceiving by fake news. By using this new tool users will be able to flag inappropriate political content. The reason behind this is the new European Parliament elections that will be held next month.

With this new tool, Twitter plans to protect voters.

Twitter is one of three social networks that are under public pressure to take a bigger role in protecting this democratic process. Also, they are asked to help in lowering social and political tensions.

According to Reuters, the European Commission in its March report on the three tech giants on Tuesday said the companies still fell short of their pledge to curb the spread of fake news.

“Today, we are further expanding our enforcement capabilities in this area by creating a dedicated reporting feature within the product to allow users to more easily report this content to us,” Twitter said in a blog.

Twitter users who see a tweet with deceptive news will be able to report them.

It will be possible by clicking on a drop-down menu. All you have to do is to select “It’s misleading about voting”. After that, you have to pick the option that describes how the tweet is misleading or deceiving. Submit the report to Twitter and voila…

What is misleading or deceiving information?

For example, telling voters to vote via a text message, email or phone call, identification requirements, the announced date or time of an election.

The new Twitter tool will be accessible from April 29 to a week after the May 23-26 European parliament elections.

But the EU isn’t the lonely place where this tool will be available.

Twitter will run it in India too.

The general elections will be held in India on Thursday.

Previously, Facebook revealed tools designed to clamp down on political involvement ahead of the European Parliament vote scheduled for May.

From the end of March, political ads have a “paid for by” disclaimer. That tools provide users access to a public database that shows who paid for the ad.

So, everyone can see who paid, how much and the structure of the visitors according to gender, age or area.
All information will be cached for seven years.

Don’t waste your money!

risk disclosure

24th April 2019
Why Recession 10 Years Later? We Have Not Learned The Lesson!

Economic experts and academics agree that there is a real possibility of the US facing a recession by the end of 2020, but how well is the US prepared for it?

By Gorica Gligorijevic

Why recession again, how is possible that we didn’t learn the lesson? April 30th will mark the 10th anniversary of Chrysler’s bankruptcy, one of the victims of the Great Recession of 2008/09.
This recession was started by the largest bankruptcy in history, by the fall of the Lehman Brothers. Which showed, along with the dot-com recession before it, that the excesses of Wall Street can cause severe economic downturns with global repercussions.

Wall Street was to be blamed for the software stock and housing bubble which brought the US and global economies to their knees.

Ten years later we are still wondering whether the US and the rest of the world are prepared for another recession.

And these worries look more pressing with the Fed’s yield curve study’s February 2019 update upping the odds for recession from 14% to 50%.

In the past couple of years many prominent economists, such as Paul Krugman, have been warning that the US regulators are ill-prepared for the next recession and that their response to the previous one was ill-suited.

Such voices of concern are now joined by the Economic Policy Institute, Washington, D.C. based think-tank, in a recent report authored by Josh Bivens, the EPI’s director of research.

Why recession ten years later

In June of this year recovery from the Great Recession will enter into the 120th month of economic expansion in the US. That way equaling the previous longest period of economic expansion which started in March of 1991. This record-setting is making people wonder when will the next recession hit?

Bivens state and many other experts agree, that there are real chances for it to happen by the end of 2020.

With Fed’s also upping their projection of chances one has to ask themselves are the US ready to tackle the next recession?

While most people think that the next recession will trigger a suboptimal response from policymakers, because of too high public debt and loo low-interest rates, it ain’t so. Though no person can successfully predict a recession, everyone can see their root causes. And the common theme is the fall of the aggregate demand, i.e. a decrease of the economy-wide spending relative to the production capacities.

EPI’s report goes to show that there are very little risks of the fiscal contraction causing the next recession.

And due to last year’s tax cuts, which are fiscal expansion measures, this is a no brainer. But that does not remove the risk of monetary contractionary policies, which could be triggered by vanning effects of Trump’s tax cuts, and is evident from the interest rates hikes in recent years.

Criticism of economic inequality in the US

EPI’s report can be read as a stern criticism of economic inequality in America, as it exposes direct connection of policymaker’s preference to aid large financial institutions and unwillingness to enact fiscal expansionary policies as a response to the economic downturn.

Simply put economic inequality and the austerity measures worsen the recession dynamics which are driven by the fall of the aggregate demand.

Bivens says that Fed’s interest rates hikes have given to regulators sense of normalcy, but robbed them of sense of urgency to provide recovery for all Americans and not just the Wall Street.

Low- and middle-income households spend a higher percentage of income than rich households, but also have a much higher propensity for spending. With the growing economic inequality being most visible in the stagnating wages of low and middle-income workers, the aggregate demand they could generate is limited, thus putting a severe limit on the recovery from a future recession, as the speed of recovery is depending upon the ability to spend.

But, according to Bivens, it’s not just household spending inability which will impede the future recovery.

“A key lesson from the Great Recession is that fiscal policy is the most effective tool for aiding recovery,” he said.

And for most of the recent recovery, the US government was very shy of the fiscal stimulus out of fears of the level of public debt. When the Fed Chair, Ben Bernanke, took unprecedented action in severely cutting interest rates he sent a very loud message to policymakers that they must do more by providing sustained fiscal stimulus.

With the recent bipartisan support to declaring the US public debt as a single greatest national security risk, the US economy looks less than ill-prepared for answering to the next recession.

Update 8/10/19

Traders-Paradise recently got this email from Andy Kearns, Content Analyst in LendEDU:
“Quite recently, our team conducted a nationally-representative survey of Americans to gauge their sentiment towards the situation of an economic recession. I believe our findings on how the risk of a recession might change consumer spending and investing habits could be an interesting addition for your readers on this page…You have my permission to use anything from the report that you liked.”
Thank you, Mr. Kearns.
So, here you, our readers, will find interactive graphs and charts that display the answers to their survey questions. Also included is an Analysis of Results section so consumers can better understand their findings.

Here is a link to the full report:

23rd April 2019
Robinhood order flow income rose thanks to HFT firms

2 min read

It looks still strange to engage HFT firms in order to increase order flow income. The skepticism is great. Also the criticism.

But the facts are that Robinhood’s order flow income rose 227% in 2018, thanks to HFT firms.

And this is a standard offer among Wall Street brokers such as E*Trade or TD Ameritrade.

What Robinhood did?

It engaged HFT firms to increase order flow.

Payment for order flow is still unknown and strange to the majority.

And somehow they read that kind of market presence as the immoral.

Traders Paradise wrote about HFT firms and strategies already.

But, let’s see what Robinhood did.

The popular millennial stock-trading app earned $69 million in order routing income in 2018. According to a survey from Alphacution Research, it three times more than the company made in 2017.

Payment for order flow is a standard offer among Wall Street brokers.

When employs HFT firm, the company is expecting more flow through its platform and it has it.

Robinhood app is very popular among the millennials.

The millennials like high-tech. And they will adopt any new product or gadget that can help them and make easier to buy anything.

When we all adopted the internet, didn’t we have the same idea on our minds? To make communication easier, to provide ourselves better access to everything.

So, where the problem is now?

High-frequency trading is called ”dark-pool” because of the absence of regulation.

Traditional traders are opponents. They say that these millisecond trades are against Wall Street and everything that is present on the markets for decades.

Actually, it is not.

High-frequency trading is based on traditional trading strategies. The main difference is the time of performance. The journey from the moment when trader see the opportunity and the moment the trader place the order is shorter. HFT algos will need millisecond while the traditional way would require much more.

Yes, it is still unknown for the majority of how this HFTs work.

Honestly, most of us will never reveal how the dishwasher works. But it isn’t the reason not to use it. Right?

We have one simple question.

Are high-frequency trading influenced based on who is paying the most?

Opponents of HFT say that it can produce big market swings.

Also, that HFT may result with an advantage for institutional investors.

Yes, engaging some HFT firm will cost you money. But, as far as we remember, only very rich houses had a dishwasher when it entered the scene. Today, it is almost impossible to find a house without it.

Even better, smaller retail investors may have benefits.

How?

HFT brings liquidity to the market.

High-frequency trading grows the market intensity and liquidity and reduces volatility.

And, there are also ordinances that require brokers to execute trades at the best price for the traders.

Considering the Robinhood’s increasing in income, well we have to say it isn’t so big as some the opponents want to say.
Also, HFT firms didn’t record such a big increase in order-routing income. For instance, TD Ameritrade had a 43% growth in this sector in one year.

And one note for the opponents of HFT.

HFT is not a trading strategy. It is the practice of advanced technology that plays traditional trading strategies. The particular trading strategies need to be evaluated rather than HFT as such.

Hence, any strategy that has a conflicting influence on market integrity or enables market abuse, has to be are completely reviewed.

And to quote our post HFT STRATEGIES – THE TIPS AND SECRETS: “Technology by itself is without morality. The people are those who can add it to high-tech.”

Don’t waste your money!

risk disclosure

22nd April 2019
HFT firms that need new employees
3 min read

Numerous HFT firms are actually small companies with a small number of employees. If you want to be one of them, you will need to show a capacity to produce income bigger than your salary plus bonus share. You have to be fantastic and have unique skills.

If your knowledge is really excellent, there are no barriers to enter some HFT firm even if the firm might not be hiring right now.
Yes, you would be asked to work almost 70 hours per week when it is necessary but the salary and intellectually provocative environment will cover your engagement.

There are a few roads into HFT. Any of them you chose you MUST have a great knowledge of math, computer sciences, physics or related technical focus.

Traders Paradise wants to represent you some of the HFT firms that are looking for new workers.

Liquidnet

The position required: Liquidnet is looking for Junior Data Scientist/Quant Developer.
Skills required:
- Bachelor’s degree in Computer Science, Mathematics or similar technical field.
- 2+ years of relevant experience OR recent Masters or Ph.D. grad in Computer Science, Mathematics
- Knowledge in a mainstream programming language, such as Python, C/C++, C#, Java, JavaScript, Haskell
FIND MORE about this job HERE
Specialty: It is a world known institutional investment network which connects asset managers with liquidity.

Company Overview: Its headquarter is in New York City but has departments in San Francisco, Boston, London, Dublin, Sydney, Toronto, Hong Kong, Singapore, and Tokyo. This trading network is connecting asset managers to pools of liquidity for both equities and fixed income. Last year it was recognized as 8 out of 34 large organizations category in New York City. That means it is one of the best employers in New York City.

Salary for this position per year: $110k – $159k

Old Mission Capital

The position required: Quant Trader.
Skills required:
- Candidates must be proficient coding with one of the following languages: Python, Java, C++, VBA, R, Matlab, Ruby.
- 4-10 years of relevant trading and research experience, with a primary focus on global equities, commodities, or fixed income instruments and/or related derivatives
- Experience with systematic market-neutral strategies over a range of holding periods/forecast horizons (short, medium, and long).
FIND MORE about this job HERE
Specialty: They have high performance automated trading system that operates globally. Old Mission Capital trade equities, currencies, commodities, bonds, options, futures and other derivatives.

Company Overview: Old Mission Capital, LLC provides brokerage and trading services. That include a model for security valuation, trading algorithms, tools for risk management. Old Mission Capital was founded in 2008 and it is headquartered in Chicago, Illinois. Old Mission Capital, LLC works as a branch of Old Mission Holdings, LLC.

Salary for this position per year: $7k – $8k per month

NJF Global Holdings

The position required: Junior Quant Trader
Skills required:
- Quantitative background
- experience with a programming language Python/C++ a plus but not required
- Ability to collaborate on projects with others but also work independently when needed
FIND MORE about this job HERE
Specialty: The company provides finance, technology, legal, and financial research services.

Company Overview: NJF Global Holdings Ltd was previously recognized as NJF Search International Ltd and modified its name to NJF Global Holdings Ltd in August 2013. The company was founded in 2003 and is based in London, United Kingdom. It has offices in New York and Chicago.

Salary for this position per year: unknown

Milliman

The position required: Quantitative Analyst to work in the Portfolio Management Group in an entry-level role
Skills required:
- Strong Excel/VBA and PowerPoint skills
- coding skills, especially C# (or other Object Oriented languages) and SQL (or other database management tools)
- experience working with Bloomberg or Morningstar
FIND MORE about this job HERE
Specialty: Retirement funding and healthcare financing, risk management and regulatory compliance, data analytics and business transformation

Company Overview: Milliman Financial Risk Management LLC is a market leader in the field of portfolio management and risk management. Their focus is on trading securities and derivatives to manage capital market risks for banks, asset managers, insurance companies, and pension plans. The Portfolio Management Group, located in Chicago currently implements risk management overlay strategies on over $50 billion in assets.

Salary for this position per year: $45k – $82k

The Princeton Group

The position required: Quant Developer
Skills required:
- Advanced programming knowledge of at least 3 programming
languages, including Python
- Strong understanding of statistical and Machine-Learning methods
- experience with Tensorflow and Keras, React.js and HTML data visualization libraries
FIND MORE about this job HERE
Specialty: Technology professionals proficient in developing computing solutions and skilled in complex business activities such as trading and trading tools technology

Company Overview: Specializing in IT placement services for Startup, Fintech and Hedge Funds. IT staffing and recruiting in New York and New Jersey. Financial modeling, quantitative analysis, and development buy and hold strategies, the generation of portfolio accounting tools and report generation.

Business initiatives including risk, trade processing, trading and the development of trading instruments.

Salary for this position per year: flexible from $24 – $27 per hour

General skills to get a job at HFT firm

The positions at an HFT firm are pretty different. Almost everyone must have extremely technical experience and knowledge.
HFT is typically a technology field, so if you want to work there you must have an excellent background in programming or electronic engineering. Some of them will require deep knowledge of hardware, for example, GPU or FPGA.

Actually, every skill that can reduce the latency and improve the execution speed of algorithmic calculations will be required in HFT.

Widespread knowledge of trading exchange is a general skill for any high-frequency trader.

HFT requires large dimensions of estimates in a very short time frame. So, the advantage is to know how to increase the speed of execution.

Also, deep knowledge of hardware design such as GPU and FPGA is an advantage. A lot of HFT firms will require a background in Linux kernel modification.

Background in Linux kernel modification is beneficial to many HFT firms.

The bottom line

The top HFT firms are usually placed in New York and London. Chicago is also a large hub for HFT.

But it is very rare to find a job in those HFT firms directly. They are doing that via recruiters.

The direct application to HFT firms is possible, yes!

But the tricky element is estimating which firms are actually in HFT.

The best way is to join some recruiter.

Traders Paradise offers you several and we will continue doing that.

Stay tuned!

Don’t waste your money!

risk disclosure
15th April 2019
High – Frequency Trading (HFT) – Why to Use

The high-frequency trading algorithm or HFT provides fast and profitable trades. Learn how.

By Guy Avtalyon

The high-frequency trading algorithm or HFT is one of the two main types of algorithms. The other is the execution algorithm.
HFT trading means to engage multiple algorithms in order to examine various markets. The orders execution is based on market conditions.

It is a program trading platform that utilizes robust processors to conduct a large number of orders very fast. Actually, the whole operation takes less than one second.

And it is a very important feature for traders.

The speed of trade execution will decide if you are a profitable trader or you are not. The logic behind this is that HFT provides you a fantastic speed in trading. So, you can gain your targeted price faster than, let’s say, ancient trader, is going to do.

The advantage of high-frequency trading is that it provides you a permanent view on markets condition because it follows market data in real-time.

Is a High-frequency trading set in today’s markets?

But there are some misunderstandings yet.

HFT is very often a cause of disagreement among traders. The traditional traders don’t like algo trading at all.
Yes, we understand why is that.

HFT leads to some effects, very unknown to some market experts. Their opinion about the algo trading is the same.
First of all HFT trading provides traders more advantages in the main processes.

HFT applications can hit even a very small profit from huge numbers of executions. You must know that there are a million executions every single day in the markets all over the world.

High-frequency trading will never hold the position for a long time.

The old-fashioned traders say it can cause great volatility and results with losses when it goes wrong.

Well, their opinion is not quite mistaken.
Let’s say it is possible. And we will recall the year 2012 when really was tricky.

HFTs caused the knockdown to Knight Capital Group. After that accident, in many countries, HFT was reduced. For example, Italy has the rule to tax 0.02% on the transaction that takes less than 0.05 seconds. The rule was launched in September 2013.
The other problem with HFT is there is no generally recognized definition. So, that can open the space for some confusion.

The truth is that the digital era requires digital work for which we need digital equipment. This digital tool leads us to speed business and the trader’s business is to execute their trades fastest as it is possible. But the principle is the same as centuries before: when you are in the market, you would like to buy or to sell. And HFT provides traders to do it. Fast, very fast.
Let’s break down HFT trading.

What is high-frequency trading?

The high-frequency trading is called ”black box” trading.

It indicates to automated systems that regularly use complicated algorithms to buy and sell securities. Extremely fast!
In the same manner, the algorithms do it at a much larger range than any individual is able to do.

Previously we said that HFT provides a very small profit from huge numbers of executions, but thanks to the high speed and large volume they produce great returns to traders.

How does it work?

The algorithm follows a “quote level” that is created including bid and ask. In volatile markets, the quote level can be changed in a second. Honestly, it could happen several times in a very short frame time.

And the algorithm is going to do what? It will place your trade in the right direction and faster than you can do it by yourself.
Without the algorithm, you will not be able to recognize all the opportunities. You might miss something extremely significant.
Yes, you can tell how and when your trades should go, but even you are fast-acting on your mouse or mobile interface, it will take time.

Moreover, the algorithm will buy and sell the same stock multiple times in a brief period of time. This means the algorithm will trade several hundred times in a single day.

Yeah, here is some problem with that. Say, you are paying $1 commission. WOW! Be careful with your HF trading! But returns you can gain are bigger.

Remember, you are using artificial intelligence.

You have to know that 75% of US stock trades are placed by algorithms. This number will expand soon and it will continue.
Why we are so sure of that?

We people, humans, will never have such ability to process that volume of data, we will never have the possibility to estimate all information required to make a trade before our rivals. Sometime we will do that, but most of the time we will not. And to make a good decision we need time.

Algorithms are able to operate with a million bits of data in one millisecond, at the same time they are able to make decisions and act.

All alone! Of course, when you turn it on.

So, why to use High-frequency trading (HFT)?

High-frequency trading demands the lowest latency in order to keep a speed advantage over the retail traders. Complex algorithms are at the core of these programs. The algorithms give directions for acting to market circumstances based on highly automatic signals.

Behind these programs lays very complicated coding. Millions, even billions of lines of code. Some of the biggest HFT companies have a continual profit during 1,000 trading days without a single loss.

The speed, access, capital, and no holding time make advantages. And risk-averse and latency too. Latency is the time it takes for data to reach its endpoints. When latency is low that means higher speed.

HFT has led to tighter bid-ask spreads.

It makes transaction costs lower. The liquidity increased and pricing efficiency is raised. The main concerns about HFT are the ability to accent and stimulate market changes.

For example, there is some risk with some out-of-control algorithm. Also, there are traders who can manipulate the market because they are scammers familiar with programming. That’s why every trader who wants to employ HFT has to be very careful when downloading such apps.

Happy trading!

15th April 2019
Pinterest is Pinning for IPO

2 min read

Pinterest wants to go public

Pinterest could be going public in early 2019 probably to the end of April.

According to an article from the Wall Street Journal, Pinterest, the social media for image discovery and sharing, is almost ready for an IPO.

It has a very extensive service but still, it is a profitless company. The question arises here, can such a company provoke the investors to invest in it. Is there, in the market, the demand for companies like this?

Anyway, Pinterest is approaching to the stock market with big strides. It has set a price span for the opening public offering below private-market peg of $12 billion. That is less than any current private estimates of the company. That means Pinterest shares could be priced at between $15 and $17 when it goes public. The Pinterest stock ticker on the NYSE should be, according to their expectation, PINS.

Pinterest, in late March, published an offering to latent investors. The document showed very interesting data. This company had about $756 million in income from online advertisements in 2018. Their income growth rate in 2018 was increased, which raised for 60% year on year. The main trump card in their hands is the fact that over 256 million people and 1.5 million companies use the Pinterest platform at least once per month.

Pinterest’s price range discourages some investors because of the overflow of tech IPOs this year.

All of us can witness about Lyft struggle on the market and sharks they met there. Well, the Lyft is an unprofitable company, that’s, true. But their shares fell below the offering price after only two days trading in the market.

“People are looking at Lyft and realizing that even if the roadshow goes extremely well and there is a lot of demand, you can’t overprice the offering,” said Elliot Lutzker, corporate and securities partner at Davidoff Hutcher & Citron for the NYT.

And the main game will come soon as the Uber, the largest of these contemporaries of tech start-ups, also has plans to run public in the next few months.

Their estimated value is about $120 billion. Uber can easily be the biggest IPO by some US company.
So, it can be very tricky for both Pinterest and Lyft to manage their public appearance with Uber included as competition.

It is obvious that Pinterest is trying its show on the road. Their plan is to make the institutional investors more interested before the first day of trading and final IPO pricing.

If investors respond with high demand in the following days, Pinterest’s shares price could increase in value.
The other important fact when valuing Pinterest is that it has $628 million in cash on its balance sheet.

But there is also another count behind. The private investors

In total, private investors have put almost $1.5 billion behind Pinterest. If Pinterest’s shares go between $15 an $17 (Pinterest plans to sell 86.3 million shares at an initial offering, which is $12 billion valuations).

The company’s initial investors will still have huge earnings.

The Pinterest biggest shareholders are Bessemer Venture Partners, Andreessen Horowitz, FirstMark Capital. According to NYT, they don’t have to be worried about IPO price range: Bessemer will be good at $952 million, FirstMark Capital would deserve $710, and Andreessen Horowitz will be good at $696.

Pinterest’s IPO really may be an examination of how much it can interest investors who are seeking fast-growing companies. Would they want to buy shares of the company with just 60% of growth in one year?

Well, anyway we will see very soon if murmur can beat the quality. There is a big hype surrounding Pinterest, and other tech unicorns and decacorns this year.

Don’t waste your money!

risk disclosure

9th April 2019
Morgan Stanley Taking Lyft For A Short Ride?

3 min read

Lyft, a popular ride-hailing app, has gone public on 29th of March this year, but since then their ride was a bit bumpy. And for that, they blame the Morgan Stanley, the underwriter of IPO for their direct competitor Uber

When Lyft got listed on the market on March 28 stock was priced at $72 dollars. When next day it started trading it opened at $87.33, but quickly reached the high of $88.10 and closed at $78.29, 8.7 percent above its listed price. On Monday, April 1, it has closed at $69.01, just short of $3 dollars under the price the initial investors have paid it. Since then it has recovered and is moving above the listing price, but Lyft still has a long ride ahead.

Reports said: Morgan Stanley is trying to short Lyft

According to the report from the New York Post, based on the unnamed sources, Morgan Stanley is trying to short Lyft. Though the NY Post has a bit of a reputation, the Monday drop in stock price precedes some rather bizarre bets. Recently Lyft has sent an email to their pre-IPO investors reminding them are not allowed to commit to any transactions that might affect a holder’s economic interest in the stock. Allegedly, this and the language of the “lock-up” agreements have led investors to hedge their investments, and not trying to earn from the fall of the stock price. A “lock-up” agreement is a legally binding contract issued by the underwriters of an IPO that prohibits people close to the company, including executive and employees, from selling shares for a period of time, in the case of Lyft for 6 months.

Despite the fact that Lyft has yet to report any profits, IPO has attracted a lot of attention and actually getting oversubscribed on the second day of trading. According to the same NY Post report, Morgan Stanley has contacted one of the IPO’s underwriter in an attempt to seek help in shorting the stock. Allegedly, Morgan’s customers who have invested in the Lyft before IPO are attempting to protect their investment from price fall, contrary to the “lock-up” the agreement and the bank is offering them such product. And the report is citing an unnamed investor saying “If I can lock in $70 now, I’m going to do that”.

Do you know what the Shorting stock does mean? Find HERE

Lyft is demanding

And Lyft has decided to respond to this situation. According to reporting of CNBC, they are threatening Morgan Stanley with a lawsuit over this situation. In a letter, which CNBC had reviewed, Lyft is demanding that the bank publicly state that they are not helping early investors in short-selling the stock. But also demand that if they are selling such product to hand over a list of shareholders who are involved. While Lyft has requested a response by the end of the day on April 2, Morgan Stanley is yet to officially reply to these allegations.

However, in the statement to CNBC, a bank’s spokesperson have stated that Morgan Stanley “did not market or execute, directly or indirectly, a sale, short sale, hedge, swap or transfer of risk or value associated with Lyft stock for any Lyft shareholder identified by the company or otherwise known to us to be the subject of a Lyft lock-up agreement.”

In the reported letter Lyft and the IPO syndicate are accusing Morgan Stanley of creating a special instrument which allows pre-IPO investors to circumvent the “lock-out” agreement and short-sell the stocks. “Our firm’s activity has been in the normal course of market-making, and any suggestion that Morgan Stanley has engaged in an effort to apply ‘short pressure’ to Lyft is false,” the spokesperson for Morgan Stanley said.

The single largest transaction

According to CNBC’s report quoting an unnamed person close to Morgan Stanley operations, short-selling accounts for 1.3% of Lyft’s trading volume, with single largest transaction accounting for 425,000 shares. Also, according to this report, the Financial Industry Regulatory Authority, the self-regulatory organization of the US banking industry may have been involved in this matter.

Maybe the strangest thing in this dispute between Lyft and Morgan Stanley is the reports from market analysts, including the Citron Research one of the investors in Lyft, calling the shorting of the company an “amateur short”. Citron has published a report stating five reasons to not short Lyft, chiefly stating projection of the Goldman Sachs that ride-hailing industry will grow to $285 billion by 2030. With that in mind, Morgan Stanley has secured the underwriting deal for Uber’s IPO, the direct and much larger competitor of Lyft. And according to CNBC’s reporting Lyft has addressed the above-mentioned letter also to the bankers who are managing the Uber’s IPO, which is interesting as the short-selling products are created in a different division of the bank, separate from investment banking.

Don’t waste your money.
risk disclosure

8th April 2019
Shell walks away from the U.S. refining lobby

2 min read

Shell or Royal Dutch Shell Plc is the first important oil and gas company to announce the plans to leave a U.S. refining lobby, AFPM.

This move comes due to the difference in policies on climate change. The point is that Shell supports the goals set by the Paris Agreement on climate change.

Their aim is to demonstrate to investors that they are familiar and want to accept to meet carbon emission goals set in Paris.

“AFPM has not stated support for the goal of the Paris Agreement. Shell supports the goal of the Paris Agreement,” the Shell said in its statement.

Actually, as our unofficial sources say, this decision is caused by the pressure of the investors.

It isn’t a secret that this oil and gas company has some very important institutional and private investors in the EU and UK who were clamoring about company’s ambiguous stance on the Paris Agreement in recent time.

Shell stated “material misalignment” over climate policy

We found that Shell, in their first review, announced it had discovered “material misalignment” over climate policy with the American Fuel & Petrochemical Manufacturers. That was the reason to announce that it will quit this organization in 2020.

It is obvious that Shell wants to show investors it is on the same page with them concerning the 2015 Paris climate agreement’s goals.

The point of the Paris agreement is to reign in global warming. With that in their minds, supporters aim to do that by lowering carbon emissions to zero by the end of this century.

Maybe this is a showcase of how investors influence on oil companies. Especially, when it comes to the climate.

It looks like no one will fool around with European investors.

Shell’s chief executive officer, Ben van Beurden, took out a more radical position than the boards of other influential oil companies.

“The need for urgent action in response to climate change has become ever more obvious since the signing of the Paris Agreement in 2015. As a result, society’s expectations in this area have changed, and Shell’s views have also evolved,” van Beurden said.

Royal Dutch Shell plc with its headquarter in Hague, Netherlands, has differed from AFPM on a number of issues. Shell said it also opposed AFPM’s opposition to pricing on carbon and low-carbon technologies.

Shell and AFPM have also been at odds about the regulation of renewable fuels.

Shell and some other big refiners in recent years have heavily invested in new, the cleaner, fuel technology.

Shell and AFPM are also in disagreement over regulating the use of renewable fuels. AFPM lobbied against standards requiring refineries to blend and government subsidy for the blending of biofuels into the petrol pool.

AFPM claimed – it hurts independent refineries.

To be clear, it is a conservative political group.

AFPM Chief Executive Chet Thompson thanked Shell for its long-standing collaboration. “We will also continue working on behalf of the refining and petrochemical industries to advance policies that ensure reliable and affordable access to fuels and petrochemicals while being responsible stewards of the environment,” Thompson said in a comment.

Shell’s review was greeted by Adam Matthews, director of ethics and engagement for the Church of England Pensions Board, which invests in Shell.

“This is an industry first,” Matthews said. “With this review Shell have set the benchmark for best practice on corporate climate lobbying not just within oil and gas but across all industries. The challenge now is for others to follow suit.”

Don’t waste your money!

risk disclosure

3rd April 2019