The going out of business part wil be quiet interesting, from the first post it does sound like the business conditions have changed. Would it still be possible to get something like this off the ground today or was he fortunate enough to get in before HFT got such players employing the best of the best?
How I Built a Startup High Frequency Trading Firm
21–30 of 35 posts
Re: How I Built a Startup High Frequency Trading Firm
#22Interesting. Even though my personal opinion on HF trading is that it is a disease that is at the core of rotting out our financial system.
Care to elaborate further?
Re: How I Built a Startup High Frequency Trading Firm
#23The going out of business part wil be quiet interesting, from the first post it does sound like the business conditions have changed. Would it still be possible to get something like this off the ground today or was he fortunate enough to get in before HFT got such players employing the best of the best?
I would say it would be extremely difficult to start a HFT program nowadays. I actually created a profitable system in 2009.. I ended up making around $500k but by 2010, I was making less and less money each month no matter what I did to try and improve the system. I finally turned it off completely about 3 months ago. I think the problem is there is simply no "dumb" volume in the market and everyone is just competing against other HFT arbitrage programs.
Re: How I Built a Startup High Frequency Trading Firm
#24The idea is great but the quality of the posts lacks until now. I just hope, you can improve that over time. It really must get more from guessing and ideas to concrete models supported with diagrams, further readings and maybe code where appropriate.
Re: How I Built a Startup High Frequency Trading Firm
#25This just screams link bait and spam. Just look at the domain: "howtohft.blogspot.com". 1) Post fake "how I built X startup to do X" post, add juicy terms like "bootstrapped" and "college". 2) Post on HN 3) ???? 4) Profit.
I don't see any step 3 - what's he selling?
he is hoping to build his reputation to land his next opportunity.
Re: How I Built a Startup High Frequency Trading Firm
#26Interesting. Even though my personal opinion on HF trading is that it is a disease that is at the core of rotting out our financial system.
Care to elaborate further?
Well in my opinion and how it was founded, the stock market should be a place for 'speculation' based on the success of a company, analysis of the market, micro and macro economics etc.
Companies in need of capital and broader ownership 'go public' to secure funds and take in investors with a monetary and intellectual interest in their business model etc.
(I know this is a 'romantic' view of the stock market)
High Speed Trading does NOTHING for owners, investors, the company or anyone but the traders themselves. Essentially it works on the same principle as a the 'worm' in Office Space (geek reference) attempting to make very small amounts of money in mistakes, miscalculations and very short-time discrepancies in valuations of financial instrument.
I feel very old voicing this opinion but it just seems like the very edge of greed and 'money for nothing' attitude to create giant data clusters aimed at just nibbling away at the corners of financial markets for profit.
Re: How I Built a Startup High Frequency Trading Firm
#27Interesting. Even though my personal opinion on HF trading is that it is a disease that is at the core of rotting out our financial system.
Your opinion is unsupported by fact. But, you know, believe what you want. Some people enjoy believing in ghosts. Perhaps you should look into that too!
Re: How I Built a Startup High Frequency Trading Firm
#28Earlier quoted context omitted.
Care to elaborate further?
Well in my opinion and how it was founded, the stock market should be a place for 'speculation' based on the success of a company, analysis of the market, micro and macro economics etc. Companies in need of capital and broader ownership 'go public' to secure funds and take in investors with a monetary and intellectual interest in their business model etc. (I know this is a 'romantic' view of the stock market) High Sp…
> it works on the same principle as a the 'worm' in Office Space (geek reference) attempting to make very small amounts of money in mistakes, miscalculations and very short-time discrepancies in valuations of financial instrument.
Just to continue this discussion a bit further, how are these mistakes supposed to be corrected otherwise? :)
Re: How I Built a Startup High Frequency Trading Firm
#29Earlier quoted context omitted.
Care to elaborate further?
Well in my opinion and how it was founded, the stock market should be a place for 'speculation' based on the success of a company, analysis of the market, micro and macro economics etc. Companies in need of capital and broader ownership 'go public' to secure funds and take in investors with a monetary and intellectual interest in their business model etc. (I know this is a 'romantic' view of the stock market) High Sp…
Agreed. But you can't blame traders for greed, since all the owners, investors, and companies are also driven by their own kinds of greed, some of which benefit no one else but themselves.
Re: How I Built a Startup High Frequency Trading Firm
#30Earlier quoted context omitted.
Care to elaborate further?
Well in my opinion and how it was founded, the stock market should be a place for 'speculation' based on the success of a company, analysis of the market, micro and macro economics etc. Companies in need of capital and broader ownership 'go public' to secure funds and take in investors with a monetary and intellectual interest in their business model etc. (I know this is a 'romantic' view of the stock market) High Sp…
I think HFT can actually serve to smooth out inefficiencies in the market.
That being said, it can, and almost certainly has, been abused. I am thinking mostly of 'quote stuffing'.
Also, there is the potential for a feedback loop between trading systems that can send prices to levels that are way undervalued or overvalued. I think overall these fears are probably way overblown but I suppose they do exist. Basically, I think it HFT fine but I hope the SEC is catching up technologically to prevent both catastrophic situations in time and bad actors from taking advantage of structural exploits.