How much
does it cost a fund to set up an operation here to trade using super computers?
Initial cost of $50m to $100m and an annual overhead of $30m? How much would be
the returns for such an operation to be profitable and sustainable? I reckon a
return of $50m per annum would be the bottom line. Could such an operation
deriving profits from skimming arbitrages and front running on inefficiencies
in the market make this kind of money and be worth the high set up and
operating cost? Why would computer traders invest so much capital and overheads
to make a few dollars? Cannot be right? How many of such computer traders are
here with their super computers plugged into the SGX system to feed on live
data to trade against the rest of the innocent investors?
Assuming
there are 10 such computer operators, could be 20 or more, with each expecting
a return of $50m annually to justify the cost of investment, it would mean they
would have to scoop up $500m from the market. This cannot be achieved by just
arbitraging or front running. What other advantages did the computer traders
have over the other traders to be able to rake in millions in guaranteed
profits and not reveal to the public? What about information like keying into
the system to tell the super computers that someone is shorting? Would the
supercomputers be computing on how to take advantage of such information to
make profits?
The
computers are having price sensitive information, like who buys what or sells
what at what price and at what volumes that ordinary investors did not have.
Isn’t this insider trading? Isn’t this front running? Aren’t these a violation
of SGX’s principle of providing a level playing field for fair trading? Are
these acttivities criminal?
Now what
would I like to ask Heng Swee Kiat and the MAS?
1.
How
many super computers are plugged into the SGX trading system?
2.
What
are they doing, what price sensitive information the computer traders would
have that other investors did not have?
3.
Are
computer traders, with their access to the SGX system and data and trading to
profit from such information a violation of SGX trading rules and regulations and
a crime?
4.
What
are the records of the profits of the computer traders
5.
Would
MAS/Heng Swee Kiat ask SGX to explain to the public/investors how the super
computers work, the live data they are mining from the SGX system and how are
these used to profit from the system? If the computers are not plugged into the
SGX system, if the computers are operating independently within the premises of
computer traders, they have all the rights to confidentiality of their
computers. But the computers are now plugged into the SGX to take advantage of
the system, their operations cannot be confidential anymore. There is a need
for more transparency to see if there are cheating the system and the
investors. The public/investors have all the rights to know what they are up
against. It is only fair.
I hope these
questions can be brought to the Remisiers Society and to the attention of MAS
and Heng Swee Kiat. Make these questions public, get the media to raise it for
public awareness and to educate the public on what is going on and whether
there is any violation of the SGX’s trading rules and regulation, whether it is
criminal to begin with.
Get the
elephant out of the system if you want a fair system, a level playing field.
4 comments:
Your questions will be addressed just like the questions the opposition brought up in Parliament. 'Sui sui' answers will be given with 'sui sui' toppings of icing on the cake.
If they are in confrontational mood, well if 'suay suay' they hit the ball into your side of the court, erh, I mean magistrate court, like what they did to the opposition over the town council case, then they will be asking all the questions.
30% got no voice leh! Got the drift?
30% got no voice leh!
Anon 8:48 am
Tiok. That's why it is so important for the opposition to be ready to be govt.
If opposition is ready to be govt, at least RB can be their stock market adviser to help them set proper regulations to manage SGX.
Well,
Rb is warned that questions maybe asked of him(Rb).
One question maybe why You asked
so many questions.
They may want to know from Rb why other remisiers, investors and others in the Trade are not asking any questions.
And another question for Rb to answer will be why he(Rb) asked. Is there anything that Rb is casting or suspicious of etc.
Simple questions but very challenging.
You know?
Dear remisers
SGX is on your side.
They want SGX to do well, so remisers can do well.
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