As someone who's experience is way more on the commodities futures side of the house, I'm shocked that blatant front running is an expected cost of business in equities trading. Even in the highly monopolized CME world front running is considered beyond the pale.
I will say (in my experience in the commodities markets), 9 times out of 10 folks who claim that they are being front run are actually just unaware of how sophisticated their competition is when it comes to micro-book structure optimization.
FX is a great market, but not for the reasons people typically think. The problem lies in brokers for the mass market (the little guy). If you're at a billion dollar hedge fund, you have access to an entirely different class of brokers (and those markets are full of intrigue...)
I second your claim ("9 times out of 10") for CME. Human nature is to assign a complex answer ("they're reading the tape") to something very simple ("my model is shit").
That said, front running happens on CME, too. Again, it is the same construction: consumer sending orders through a nefarious broker.
Comments
I'll grant trading FX is for crazy people.
As someone who's experience is way more on the commodities futures side of the house, I'm shocked that blatant front running is an expected cost of business in equities trading. Even in the highly monopolized CME world front running is considered beyond the pale.
I will say (in my experience in the commodities markets), 9 times out of 10 folks who claim that they are being front run are actually just unaware of how sophisticated their competition is when it comes to micro-book structure optimization.
FX is a great market, but not for the reasons people typically think. The problem lies in brokers for the mass market (the little guy). If you're at a billion dollar hedge fund, you have access to an entirely different class of brokers (and those markets are full of intrigue...)
I second your claim ("9 times out of 10") for CME. Human nature is to assign a complex answer ("they're reading the tape") to something very simple ("my model is shit").
That said, front running happens on CME, too. Again, it is the same construction: consumer sending orders through a nefarious broker.