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Goldman Sachs is spending $100M to shave milliseconds off stock trades

cnbc.com

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Re: Goldman Sachs is spending $100M to shave milliseconds off stock trades

#111

Post by jammygit »

saberdancer wrote: post #89
habnds wrote: post #78

Earlier quoted context omitted.

people aren't mad only because tons of money is made on hft. It's also because money is _wasterd_ on hft. That's $100 million dollars spent on something that has 0 use to society. It's just rich people playing weird games. Think about the social benefits of $100 million invested in nyc transit infrastructure. The economy's incentive structure is broken and this is a prime example.

Those 100m are not destroyed by burning them in an HFT furnace but rather used to pay developers, hardware, factory workers etc. Sure, it's not going directly into infrastructure but it is not lost. In fact, it's quite possible that if it wasn't invested into HFT it would be held as cash by the company or paid out as a dividend (which is fine as well).

Your definition of 'waste' is awfully narrow. I'm not sure anything but destruction of the cash is waste in that view - except that its not even then a total waste because you are helping the money burning industry and furnace industry to thrive.

Re: Goldman Sachs is spending $100M to shave milliseconds off stock trades

#114

Post by snovv_crash »

dna_polymerase wrote: post #104
snovv_crash wrote: post #99

Earlier quoted context omitted.

That is false. The 100m could have been spent on something which increases the productivity of people. It would still go to devs, factories, etc but at the end there is something from which society benefits.

So paying hardware manufacturers and programmers for their work doesn't benefit society? It is not like firing these people would see more cancer research or other stuff you might regard as more beneficial for society.

It does, but it doesn't create anything which can be leveraged to improve things further. Might as well just give the people the money directly, with no expectations of deliverables.

Re: Goldman Sachs is spending $100M to shave milliseconds off stock trades

#115

Post by adrianN »

nickles wrote: post #56
adrianN wrote: post #55

Earlier quoted context omitted.

I wouldn't mind if my credit card only allowed transactions once a minute. I don't think I ever had to do two transactions in a minute.

> I don’t think I ever had to do two transactions in a minute. If the network only clears once a minute, you need to wait at least a minute for each person ahead of you in line at the store. Alternatively, you need to be willing to pay more to cut them in line.

Wait, isn't the correct analogy for the stock market that there is an (almost) infinite amount of registers, but each of them can only clear a customer at the first second of each minute?

Re: Goldman Sachs is spending $100M to shave milliseconds off stock trades

#116

Post by habnds »

codyb wrote: post #79
habnds wrote: post #78

Earlier quoted context omitted.

people aren't mad only because tons of money is made on hft. It's also because money is _wasterd_ on hft. That's $100 million dollars spent on something that has 0 use to society. It's just rich people playing weird games. Think about the social benefits of $100 million invested in nyc transit infrastructure. The economy's incentive structure is broken and this is a prime example.

Who’s mad about HFT? 100m out of a what 40tn dollar world GDP? I get it, just seems... unlikely. Who cares?

Maybe mad is a strong word, but, it isn't just $100m, That's one investment by one company. It's billions of dollars across the world to gain arbitrary milliseconds.

Restructuring financial markets, to use periodic auctions for example or by adding speed bumps rather than continuous trading would probably do away with an entire wasteful industry and benefit the actually relevant parties in the financial system, people who have money, and people who need money, at the cost of the unnecessary middlemen.

Re: Goldman Sachs is spending $100M to shave milliseconds off stock trades

#117

Post by NohatCoder »

1e-9 wrote: post #110

Markets around the world are determining prices on a massive variety of instruments that derive value from the current and future value of products such as currencies, interest rates, equities, grains, livestock, metals, oil, gasoline, natural gas, and electricity. These prices allow us to prioritize resources, make fair transactions, and manage risk (i.e. buy insurance on the value of critical products so that we ca…

Meh, the short term price fluctuations are almost pure noise. Faster trading just incase the frequency of the noise. Increasing frequency only works if the feedback loops are stable.

Re: Goldman Sachs is spending $100M to shave milliseconds off stock trades

#118

Post by habnds »

TomMarius wrote: post #85
habnds wrote: post #78

Earlier quoted context omitted.

people aren't mad only because tons of money is made on hft. It's also because money is _wasterd_ on hft. That's $100 million dollars spent on something that has 0 use to society. It's just rich people playing weird games. Think about the social benefits of $100 million invested in nyc transit infrastructure. The economy's incentive structure is broken and this is a prime example.

HFT has more benefit than huge villas and cars and private jets. It can bring benefit to software and hardware. I'm okay.

What sort of benefits has it brought to software and hardware?

edit: honest question :)

Re: Goldman Sachs is spending $100M to shave milliseconds off stock trades

#119

Post by stillworks »

stakhanov wrote: post #109

...actually it doesn't sound to me like this article is about HFT-based prop trading at all (prop trading would mean Goldman Sachs taking positions onto their own books), but about the business unit called GSAT (Goldman Sachs algorithmic trading) who execute trades on behalf of clients, so never taking any positions onto their own books. The traditional market model used to be that at every point in time, a market ma…

Have to agree.

Catering to HFT shops was already in 100 microsecond latency a few years ago using commodity hardware and software (cannot speak of Goldman Sachs but another one of similar ilk, can't imagine GS were much far away if not even better)

Re: Goldman Sachs is spending $100M to shave milliseconds off stock trades

#120

Post by wallace_f »

denormalfloat wrote: post #64
wallace_f wrote: post #33

Earlier quoted context omitted.

You don't gain anything. GS is in an arms race with other fintech firms to be first in line to act on new information.

That's not right, you (we) get accurately priced securities. We also get tighter bid-ask spreads.

Accurately priced securities 100ms faster (which have had any profit opportunity already arbitraged). Grea.t.
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