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Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol

nytimes.com

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Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol

#21

Post by twoodfin »

simias wrote: post #17
downer68 wrote: post #3

An interesting side-effect of this, is that it would enable a standard of synchronization, across geographic regions, such that one could treat a set of virtual machines as one ultra-wide-bus CPU with a 1 GHz clock speed. All of the local overhead of real system resouces and network synchronization could handled by the remainder of the real CPU clock available to the bare metal, but contribute to the computation of a…

Suppose you do a simple addition on your 4096bit "CPU", you have to propagate the carry from the first 64bits to the next 64. How do you do that within your clock cycle over the internet? You'd have to pipeline them so that each subsequent 64bit add waits for the previous carry, but then wouldn't it be orders of magnitude faster to just do it on the same CPU rather than taking the time and resources to do a single 64…

I’m not quite sure what GP is getting at, either, but I can sort of see the lockstep synchronization described letting you build something like the original Thinking Machines Connection Machine out of more distributed parts.

The original Cray supercomputers also benefitted from a design where every wire in the pipeline was the same length for “free” synchronization courtesy of the speed of light.

Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol

#23

Post by chaboud »

downer68 wrote: post #3

An interesting side-effect of this, is that it would enable a standard of synchronization, across geographic regions, such that one could treat a set of virtual machines as one ultra-wide-bus CPU with a 1 GHz clock speed. All of the local overhead of real system resouces and network synchronization could handled by the remainder of the real CPU clock available to the bare metal, but contribute to the computation of a…

"...across geographic regions, such that one could treat a set of virtual machines as one ultra-wide-bus CPU with a 1 GHz clock speed."

I'm not entirely sure what you're trying to say here, but I am entirely sure that it's wrong.

A precise clock isn't the same thing as the removal of latency, and the operations of a CPU are ordered. That is, I can't start working on the multiplication of A * (B + C) until the addition result is available. Furthermore, if the elements of the operation, B and C, or parts of those elements, were separated by miles (or even feet), the latency of that operation would increase by orders of magnitude.

I doubt that even a 1MHz distributed processor would be achievable as a large distributed bit field computer as you've laid out here.

If you're worried about overhead in computing, it is critical to remember that a foot is a nanosecond. I'd much rather break my data down to register size (and I often do) than ship my data over a wire or fiber (which I also often do).

Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol

#24

Post by qeternity »

chaboud wrote: post #20

"So-called high frequency trading firms place trades in a fraction of a second, sometimes in a bet that they can move faster than bigger competitors." First off: no. Big money plays in high frequency trading (roughly half of all trading activity), and the smaller traders without instantaneous access are the losers in this game. Secondly, NASDAQ's obsession with precise global sequencing is A) misguided and B) effecti…

Most HFT shops are relatively small. HFT is all about latency and turn over. Big quant shops might have HFT elements but lean far more towards systematic/algo strategies that can be relatively high latency (still super low latency, but not HFT) because these are the only strategies that you can deploy serious var with. The guys crushing HFT are not huge hedge funds, and they are solving more engineering problems than building trading models.

Also, no, small traders don't lose. Retail traders et al get much tighter spreads, cheaper execution by routing to internalizers, etc. It's big institutionals with size to trade that get front run and have to worry about HFT killing their shortfall. On the institutional side, it's about lit venues preferring HFT w/ special orders types and thin top of book. On the retail side, the issue mostly comes down to direct feed vs. SIP/CQS thanks to NBBO that opened the door for latency arb courtesy of yet more regulation. Blame your regulators folks. This is why dark pools became a thing.

> and the liquidity support they provide to the markets is dubious, at best, since they pull the plug as soon as things get crazy

This bit is certainly true.

Source: hedge fund trader who hates HFT not in principal but because they are good at what they do

Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol

#25

Post by amluto »

chaboud wrote: post #20

"So-called high frequency trading firms place trades in a fraction of a second, sometimes in a bet that they can move faster than bigger competitors." First off: no. Big money plays in high frequency trading (roughly half of all trading activity), and the smaller traders without instantaneous access are the losers in this game. Secondly, NASDAQ's obsession with precise global sequencing is A) misguided and B) effecti…

I don’t think this helps enough. It’ll keep people from pouncing on NASDAQ very quickly due to NASDAQ movements, but instead people will play the game of trying to be the last one into the window when trading based on information from other sources.

Some form of clever randomization might help, but getting that right is very complicated.

Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol

#26

Post by myself248 »

chaboud wrote: post #20

"So-called high frequency trading firms place trades in a fraction of a second, sometimes in a bet that they can move faster than bigger competitors." First off: no. Big money plays in high frequency trading (roughly half of all trading activity), and the smaller traders without instantaneous access are the losers in this game. Secondly, NASDAQ's obsession with precise global sequencing is A) misguided and B) effecti…

What would be the negative effect if the time quantum was much larger, say, an hour, a day, a week?

Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol

#27

Post by chaboud »

amluto wrote: post #25
chaboud wrote: post #20

"So-called high frequency trading firms place trades in a fraction of a second, sometimes in a bet that they can move faster than bigger competitors." First off: no. Big money plays in high frequency trading (roughly half of all trading activity), and the smaller traders without instantaneous access are the losers in this game. Secondly, NASDAQ's obsession with precise global sequencing is A) misguided and B) effecti…

I don’t think this helps enough. It’ll keep people from pouncing on NASDAQ very quickly due to NASDAQ movements, but instead people will play the game of trying to be the last one into the window when trading based on information from other sources. Some form of clever randomization might help, but getting that right is very complicated.

I think you could account for hold-out by having the resolve window be longer than the trade-insert window, at least to an extent.

The trade-insert window can't be too long, or it would leave lots of room for regret, like people who voted by mail for a candidate caught in a scandal two days before an election.

Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol

#28

Post by mikert5671 »

qeternity wrote: post #24
chaboud wrote: post #20

"So-called high frequency trading firms place trades in a fraction of a second, sometimes in a bet that they can move faster than bigger competitors." First off: no. Big money plays in high frequency trading (roughly half of all trading activity), and the smaller traders without instantaneous access are the losers in this game. Secondly, NASDAQ's obsession with precise global sequencing is A) misguided and B) effecti…

Most HFT shops are relatively small. HFT is all about latency and turn over. Big quant shops might have HFT elements but lean far more towards systematic/algo strategies that can be relatively high latency (still super low latency, but not HFT) because these are the only strategies that you can deploy serious var with. The guys crushing HFT are not huge hedge funds, and they are solving more engineering problems than…

This used to be true. Small HFT firms can find a niche thats profitable, but thats because there isnt enough money to be made by the big firms in those niches.

In the last few years there has been massive consolidation of the smaller HFT players, the space is commoditized and controlled by a few firms.

Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol

#29

Post by qeternity »

mikert5671 wrote: post #28
qeternity wrote: post #24

Earlier quoted context omitted.

Most HFT shops are relatively small. HFT is all about latency and turn over. Big quant shops might have HFT elements but lean far more towards systematic/algo strategies that can be relatively high latency (still super low latency, but not HFT) because these are the only strategies that you can deploy serious var with. The guys crushing HFT are not huge hedge funds, and they are solving more engineering problems than…

This used to be true. Small HFT firms can find a niche thats profitable, but thats because there isnt enough money to be made by the big firms in those niches. In the last few years there has been massive consolidation of the smaller HFT players, the space is commoditized and controlled by a few firms.

Yes, consolidation and layoffs. Go see how many KCG guys were kept by Virtu. If anything the industry has gotten smaller. People are just buying up flow now. There are no "big" HFT firms when compared to proper buy side.

> the space is commoditized and controlled by a few firms

Few firms != big firms

Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol

#30

Post by mikert5671 »

qeternity wrote: post #29
mikert5671 wrote: post #28

Earlier quoted context omitted.

This used to be true. Small HFT firms can find a niche thats profitable, but thats because there isnt enough money to be made by the big firms in those niches. In the last few years there has been massive consolidation of the smaller HFT players, the space is commoditized and controlled by a few firms.

Yes, consolidation and layoffs. Go see how many KCG guys were kept by Virtu. If anything the industry has gotten smaller. People are just buying up flow now. There are no "big" HFT firms when compared to proper buy side. > the space is commoditized and controlled by a few firms Few firms != big firms

Yeah its funny, I still read outrage about those greedy "HFT players", as if HFT was still highly relevant. It was a blip in time of the financial markets when no one had high speed trading but a few. The alpha has been washed away.
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