Eric Hunsader is the founder of Nanex, a whole market streaming data feed, which broadcasts 20 billion data points every day. Eric started out in the early 80’s as an algorithmic trader, then became a self-educated programmer, and since then he’s written many software applications for financial data.
Eric is notorious for facing down the many issues that surround high-frequency trading. He firmly believes that HFT firms steal money, exchanges have rigged the market, and the regulators that allow this type of activity to continue are corrupt individuals.
We also discuss quote stuffing, daily mini-flash crashes, and the $750,000 whistleblower award from the SEC that Eric recently received.
What’s Covered in This Interview:
- What led to Eric trading in 1984 and how he became a self-educated programmer.
- How the internet changed everything.
- The 25,000 hours that went into the release of NxCore, the flagship product of Nanex.
- That time Eric began to notice HFT activity in the data, and the gigantic rabbit hole that came out of reporting on delayed prices during the Flash Crash.
- Eric breaks down the underlying problem with HFT, why the U.S. stock market is affected more than any other market, and the parties that make this possible.
- What is ‘quote stuffing’ and how is this tactic used to open up an opportunity for grabbing “free money.”
- The cause of the daily, multiple ‘mini-flash crashes,’ who benefits, and why the limit up-limit down rule hasn’t made a difference.
Links and Resources:
- Money & Speed: Inside the Black Box – Eric’s explanation of what happened during the 2010 ‘Flash Crash’ is featured in this VPRO documentary.
- The Wall Street Code – Another VPRO documentary featuring Eric, this time looking at Haim Bodek‘s well-known HFT whistle-blowing case.
- Nanex.net – Visit the Nanex website to learn more about Eric’s independent market structure research and the NxCore ticker plant.
- @NanexLLC – Follow Eric on Twitter—for insightful, granular visualizations of the U.S. stock and futures markets.
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