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'Flash Boys' IEX stock exchange opens for business

latimes.com

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Re: 'Flash Boys' IEX stock exchange opens for business

#91

Post by minimax »

tptacek wrote: post #49
modoc wrote: post #24

Earlier quoted context omitted.

As a mostly lay person, for me it's vilified because my understanding of it is that HFT has a significant advantage over my own personal trading, and that through this advantage HFTs are able to make "more" profits than would be possible without HFT. My brain tells me that some of these profits are likely at my own trades' expense, and that while markets and economies rise and fall, my own profits are negatively impa…

You don't do the kind of trading HFTs do. No matter whether trading is done with hand signals or in FPGAs, you were never going to be making markets. Meanwhile, cost of trading for normal people like us has gone through the floor. And we're only really looking at the last 15 years when we think about trading costs, but even steeper reductions precede that, and it was all brought about by replacing human market makers…

I think labeling literally all human market makers as "crooked" is probably excessive...

Re: 'Flash Boys' IEX stock exchange opens for business

#92

Post by prklmn »

tptacek wrote: post #84
mmodahl wrote: post #50

Earlier quoted context omitted.

The technology put a lot of people out of work and at the same time eliminated a loophole that wealthy people had to take advantage of the markets. That is a recipe for vilification. Think of the wrath of the unemployed truck and taxi drivers that will be aimed at the evil computer programmers and engineers who perfect self-driving cars and trucks. The headlines will be amazing.

The technology targets the wealthy people who were taking advantage of the markets.

This is true only to a certain extent. Mutual funds have been getting squeezed and the impact, though not immense, trickles down to millions of middle class investors.

Re: 'Flash Boys' IEX stock exchange opens for business

#93

Post by tptacek »

prklmn wrote: post #92
tptacek wrote: post #84

Earlier quoted context omitted.

The technology targets the wealthy people who were taking advantage of the markets.

This is true only to a certain extent. Mutual funds have been getting squeezed and the impact, though not immense, trickles down to millions of middle class investors.

No. The opposite is true. Vanguard, one of the largest and beyond a doubt the most trustworthy mutual fund complex, is on the record repeatedly as saying HFTs have lowered their cost of trading.

Where did you get your claim from? I can source mine, if you really need me to.

Re: 'Flash Boys' IEX stock exchange opens for business

#94

Post by tptacek »

minimax wrote: post #91
tptacek wrote: post #49

Earlier quoted context omitted.

You don't do the kind of trading HFTs do. No matter whether trading is done with hand signals or in FPGAs, you were never going to be making markets. Meanwhile, cost of trading for normal people like us has gone through the floor. And we're only really looking at the last 15 years when we think about trading costs, but even steeper reductions precede that, and it was all brought about by replacing human market makers…

I think labeling literally all human market makers as "crooked" is probably excessive...

I've done a fair bit of exchange work, and the stories I've heard suggest I'm not far from the mark.

Re: 'Flash Boys' IEX stock exchange opens for business

#95

Post by minimax »

tptacek wrote: post #94
minimax wrote: post #91

Earlier quoted context omitted.

I think labeling literally all human market makers as "crooked" is probably excessive...

I've done a fair bit of exchange work, and the stories I've heard suggest I'm not far from the mark.

What about all the human market makers that went on to found HFT firms. DRW, GETCO, Jump, Virtu, etc. Bad guys as well?

Re: 'Flash Boys' IEX stock exchange opens for business

#96

Post by tptacek »

minimax wrote: post #95
tptacek wrote: post #94

Earlier quoted context omitted.

I've done a fair bit of exchange work, and the stories I've heard suggest I'm not far from the mark.

What about all the human market makers that went on to found HFT firms. DRW, GETCO, Jump, Virtu, etc. Bad guys as well?

I do not believe DRW is colluding with Virtu to keep spreads wide. In fact, all available evidence overwhelmingly suggests that the opposite is happening.

But human market makers colluded routinely, and in some cases famously.

Re: 'Flash Boys' IEX stock exchange opens for business

#97

Post by r00fus »

wocram wrote: post #29
wehadfun wrote: post #25

Was the 30 mile cable necessary to create a speed bump. Seems to me a few lines of code would have worked.

Sure it would work, but with substantially more variance than a cable.

And there's a firm guarantee that you can't cheat unless you beat the physics of light propagation...

Or find a way to route around the 30m cable...

Re: 'Flash Boys' IEX stock exchange opens for business

#98

Post by minimax »

tptacek wrote: post #96
minimax wrote: post #95

Earlier quoted context omitted.

What about all the human market makers that went on to found HFT firms. DRW, GETCO, Jump, Virtu, etc. Bad guys as well?

I do not believe DRW is colluding with Virtu to keep spreads wide. In fact, all available evidence overwhelmingly suggests that the opposite is happening. But human market makers colluded routinely, and in some cases famously.

Do you think when Don Wilson (founder of DRW) was making markets in the pits at the CME in the 80s that he was colluding with anyone is more what I was asking. Does he deserve to be labeled "crooked as a barrel of fishhooks?"

Re: 'Flash Boys' IEX stock exchange opens for business

#99

Post by QuarterReptile »

eggy wrote: post #30

I've read both sides of the argument about the IEX delay, and my common sense tells me you cannot try and put the genie back in the bottle. If technology exists, has been discovered, you cannot thwart it by trying to mask it by retarding it. It think it is ironic that an exchange, IEX, founded with one of its aims being to level the playing field by calling out HFT as 'wrong' or 'unfair', and yet allow for their dyna…

In what way could this comment possibly be worthy of a down vote? It's complete and thought-provoking.

Re: 'Flash Boys' IEX stock exchange opens for business

#100

Post by brianwawok »

prklmn wrote: post #92
tptacek wrote: post #84

Earlier quoted context omitted.

The technology targets the wealthy people who were taking advantage of the markets.

This is true only to a certain extent. Mutual funds have been getting squeezed and the impact, though not immense, trickles down to millions of middle class investors.

I only invest in index funds. I do not day trade. I am all for HFT and a liquid market.
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