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If you live in Asia, you will hear this refrain about the Chinese stock market again and again: that it is the government casino. The way the casino works is through guanxi, a set of connections to the higher authority and a network of favors, if not bribes. According to locals, Guanxi permeates pretty much every aspect of the Chinese society. And the Chinese stock market, in particular, has proven to be beholden to Guanxi: those with connections and, as a result, in the know about upcoming government moves make a ton of money. The regular folks are pure gamblers, placing their money on theRead More →

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By Irene Aldridge What is the quantitative evidence regarding the presence of aggressive high-frequency traders (HFTs) in today’s markets? Our firm’s AbleMarkets Aggressive HFT Index tracks the participation of aggressive HFTs in real-time and offers some interesting observations. As 2014 rolls to a close, we are able to offer comprehensive statistics on tick-by-tick, minute-by-minute and hour-by-hour evolution of aggressive HFT participation during this past year, as well as daily statistics presented in this article. Why does aggressive HFT participation matter? Multiple academic studies have confirmed that aggressive HFTs worsen market conditions for institutional investors. The aggressive HFTs are not to be confused with the passiveRead More →

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By Irene Aldridge Many articles on the subject of money talk about different ways to invest the money: which stocks to pick, whether to choose bonds over stocks and Exchange-Traded Funds (ETFs) versus mutual funds. Few of the pieces, however, address the key issue underlying any allocation which may be keeping investors up at night: the implicit costs of placing their money into someone else’s hands. Any investment decision amounts to just that: transferring money into someone else’s care. When purchasing stock of a particular company, an investor transfers his money to the management of the stock-issuing corporation with the sole hope that the managementRead More →