From The Economic Times (India), September 14:
Thomas Peterffy helped launch the electronic-trading revolution that transformed the US stock market. And while the billionaire hasn’t soured on automation, he’s taking a lead role fighting back against the speediest traders.....MORE
Interactive Brokers Group Inc. announced Wednesday that it will list its shares on an exchange run by IEX Group Inc., which was made famous by Michael Lewis in “Flash Boys.” The 2014 book documented the market’s efforts to use a 350-microsecond speed bump to eliminate advantages IEX believed the fastest traders had in US stocks. When shares of Interactive Brokers move over from Nasdaq Inc., it will be IEX’s first win in its delayed plan to list corporations.
“Our investors are likely to receive better executions when they trade our stock, or for that matter any other stock, on IEX,” Peterffy, Interactive Brokers’ chairman, said in an email Wednesday.
Peterffy, 73, was instrumental in getting computers to trade stocks. Three decades ago, to bypass a Nasdaq rule requiring all orders to be entered on a keyboard, his team built a robot to do it.
“On active trading days, the robot typed so fast it sounded like a machine gun,” National Public Radio reported in 2012.
Eventually, traders were allowed to plug directly into exchanges like Nasdaq’s, eliminating the need for such workarounds. The pace of trading accelerated dramatically, and some order times are now measured in nanoseconds....
Despite most of his $18 billion net worth being due to Interactive Brokers, he was looking to stop the Federales calling time on the game, here's his speed bump suggestion via a June 2014 post:
Want To Curtail High Frequency Trading Abuse? Randomly Delay Orders
Peterffy's Smart Plan for Flash Trades
One of high-frequency trading's fathers has offered the SEC a plan to keep HFTs from taking advantage of investors.He also cracked the largest landholders in the U.S. list, debuting at #19 this year:
It is easy to lambast high-frequency trading as an automated pickpocketing machine that legally steals from investors. It is much harder to mitigate HFT's market impact without getting lost in the cobweb of complex regulations that govern the nation's exchanges and trading venues.
Thomas Peterffy, one of the fathers of electronic trading, has recommended a simple solution to the Securities and Exchange Commission that, if enacted, would curtail many of the unfair advantages now enjoyed by high-frequency trading firms.
The founder and chair of Interactive Brokers Group (ticker: IBKR) has proposed that all stock and options trading venues randomly delay orders by 10 to 200 milliseconds before releasing them for execution.
He says the delays would keep HFTs from jumping ahead of mutual funds and dealers, and changing prices, before slightly slower systems execute their orders. In theory, dealers could take the money otherwise spent on making certain that they run ultrafast computer systems and make better markets. The delays would keep markets fast and automated, which protects against fraud and manual order-handling errors.
Peterffy says the random delay would still offer a slight advantage to speedy trading systems, but it would significantly impair HFT front-running. "For example, even if an HFT's systems were 10 milliseconds faster than a mutual fund trying to do the same trade, the HFT would only trade ahead of the mutual fund around 55% of the time, rather than 100% of the time as in the current market structure," Peterffy advised the SEC. His proposal included a chart explaining the percentage of time that an HFT firm will trade ahead of a mutual fund if both orders are randomly delayed according to his proposal.
For years, Peterffy has been concerned that high-frequency trading was weakening the markets, and interfering with the ability of dealers, like his Timber Hill unit, to make markets in thousands of stocks and options contracts.....MORE
The Largest Landholders In the United States: The Land Report 100
