Should-you-take-social-security-early: Personal Finance News from Yahoo! Finance. Leave it boomers to flout one of the long-held rules of retirement planning. Afraid lawmakers will soon lift the retirement age of Social Security or shrink benefits, many are ignoring the traditional advice of financial planners and retirement experts everywhere and taking their benefits as soon as possible. Are they right to rebel? The number of Americans opting to take Social Security at 62 -- currently the youngest age allowed -- is on the rise.
In 2009, 42% of 62-year-olds claimed benefits, up from 38% in 2007, according to economists at the Brookings Institution in Washington, D.C. And while more recent data is not yet available, financial planners and industry experts say the ranks of early claimers are still growing. Are all those fears realistic? [ 10 Bargain Retirement Hot Spots ] But even these shortfalls are a ways out, and do little to explain why boomers are scrambling now to claim benefits. . [ Bad Money Habits to Drop ] Popular Stories on Yahoo! What's Behind High-Frequency Trading. Updated Aug. 1, 2009 11:59 p.m.
ET High-frequency trading, long an obscure corner of the market, has leapt into the spotlight this year. Wildly successful in 2008, high-frequency traders are the talk of Wall Street, attracting big bucks and some unwanted attention. Concerns that some traders are taking advantage of less fleet-footed investors has drawn the attention of regulators and members of Congress.
The following is an explanation of the core issues, based on interviews with industry participants and regulators. _FS_algorithmictrading.pdf (application/pdf Object) High-Frequency Trading. High Frequency Trading News & Resources. Extra: Speed Traders Helping Small Investors? - 60 Minutes. Wall Street: The Speed Traders - 60 Minutes. How Speed Traders Are Changing Wall Street - 60 Minutes. It may surprise you to learn that most of the stock trades in the U.S. are no longer being made by human beings, but by robot computers capable of buying and selling thousands of different securities in the time it takes you to blink an eye.
These supercomputers - which actually decide which stocks to buy and sell - are operating on highly secret instructions programmed into them by math wizards who may or may not know anything about the value of the companies that are being traded. It's known as "high frequency trading," a phenomenon that's swept over much of Wall Street in the past few years and played a supporting role in the mini market crash last spring that saw the Dow Jones Industrial Average plunge 600 points in 15 minutes. Most people outside of the industry know very little, if anything, about it. 60 Minutes Overtime: Robot TradersIn a secret new building in New Jersey, high-speed computers decide which stocks to buy and sell. Copyright 2010 CBS. Risk_highfrequency.pdf (application/pdf Object) Goldman's $4 Billion High Frequency Trading Wildcard. A recent story in Advanced Trading goes after some of the minutae of High Frequency Trading and provides a glimpse of the total value that HFT may provide to behemoth PT powerhouses such as Goldman Sachs.
The article presents a very valuable perspective on just why HFT is so critical these days, especially when cash traders go for 6 hour Starbucks breaks between 10 am and 3:30 pm: "high frequency trading firms, which represent approximately 2% of the 20,000 or so trading firms operating in the US markets today, account for 73% of all US equity trading volume. These companies include proprietary trading desks for a small number of major investment banks, less than 100 of the most sophisticated hedge funds and hundreds of the most secretive prop shops, all of which operate with one thing in mind—capture profit opportunities by being smarter and faster than the closest competition. " And the conclusion: This is indeed, a conclusion that Zero Hedge has been pounding the table on for months. Man Vs. Machine: Pros and Cons of High-Speed Trading.
The Tabb Group estimates that there are roughly 400 HFTs.
Of that, there are roughly 150 HFTs that trade U.S. equities. They estimate that the gross trading profit for all HFTs in 2010 will total $5.6 billion (not including brokerage and SEC fees). That works out to about 0.2 cents per share gross profit, but once brokerage and SEC fees are deducted, net profit was about half that. Tradeworxcame to somewhat similar conclusions. In a filing with the SEC, they estimated net profits of HFTs at $2 billion a year, once brokerage and SEC fees are deducted. With profits like that, you need to trade big numbers. Sound like a lot? Is Something Wrong? Seth Merrin Examines the Pros and Cons of High Frequency Trading. Flash orders and high frequency trading have become hot topics in the media lately, so what does Seth Merrin, founder and CEO of Liquidnet Holdings , operator of the largest buy-side only dark pool, think these trends mean for the institutional investor?
While high frequency trading as a category has its pros and cons, like all trading, but flash orders have absolutely no pros, says Merrin, an advocate of the institutional investor.