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Intruder at the top of the 20 meter amateur band?

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Re: Intruder at the top of the 20 meter amateur band?

#101

Post by ska »

chordalkeyboard wrote: post #97
ska wrote: post #92

Earlier quoted context omitted.

I see where you are going here, but it seems to be many orders off magnitude off in time relative to HFT.

its highly counterintuitive to see the modern system in the same terms as the capital markets of last millennium. and I'm convinced the system isn't perfect, I'm sure there are things that should be changed. I'm merely suggesting that the market sped up as people learned to do market stuff faster, and that market stuff is ultimately a process of allocating capital resources.

Ok, I get that - I don't think it really addresses my concern/question about whether or not this is far in the range of diminishing utility.

Put it another way, if the number of HFT trades were suddenly cut in half, what 1st order impacts would be felt by people outside those markets? The heart of the "but we're providing liquidity" argument is that this is a service provided that has real value outside the market. If that's not true the particular argument falls apart, doesn't it?

Re: Intruder at the top of the 20 meter amateur band?

#102

Post by giantrobot »

cma wrote: post #59
andromeduck wrote: post #30

Earlier quoted context omitted.

Arbitrage is good actually. Tigher spreads make transactions cheaper and safer for the smaller players.

Saving one microsecond is rewarded the same as saving one millisecond, as long as you beat out the next best guy. There are vast diminishing returns to society but the winner is still rewarded the same so incentivized to make it faster and faster, ultimately burning away energy and misallocating capital until the reward is exhausted, and then repeating each time a new generation of hardware is out.

Not quite, you're forgetting the T in HFT. If everyone was just buying securities a microsecond vs a millisecond might not matter much. What happens is a lot of HFTs act as market makers. They arbitrage positions they create which screws over any non-HFTs. It also moves the price of securities for no reason which affects everyone holding that security. There's also been plenty of cases of HFTs doing front-running and spoofing.

The effects of HFTs aren't limited to HFT vs traditional traders. Their artificial arbitrage affects people's retirement funds and the like. It wouldn't be so bad if they were just making money off other traders but instead they're making money off everyone with money in the markets.

Re: Intruder at the top of the 20 meter amateur band?

#103

Post by ddevault »

andromeduck wrote: post #30
ajkjk wrote: post #26

I'm sure I'm not the only one who would like to see the whole HFT industry be deleted. What a waste of human intellect.

Arbitrage is good actually. Tigher spreads make transactions cheaper and safer for the smaller players.

This presumes that the stock market, and capitalism itself, are both a net good. Not everyone would agree with that.

Re: Intruder at the top of the 20 meter amateur band?

#104

Post by rtpg »

andromeduck wrote: post #30
ajkjk wrote: post #26

I'm sure I'm not the only one who would like to see the whole HFT industry be deleted. What a waste of human intellect.

Arbitrage is good actually. Tigher spreads make transactions cheaper and safer for the smaller players.

Arbitrage is good, sure. But what is the timescale that is useful? Is sub-second resolution of arbitrage actually useful?

What is the argument against Arbitrage having a lag of even, say, 90 seconds?

And like... who cares about the price delta on a time scale even less than an hour apart from day traders? FX stuff I guess?

Re: Intruder at the top of the 20 meter amateur band?

#105

Post by zozbot234 »

giantrobot wrote: post #102
cma wrote: post #59

Earlier quoted context omitted.

Saving one microsecond is rewarded the same as saving one millisecond, as long as you beat out the next best guy. There are vast diminishing returns to society but the winner is still rewarded the same so incentivized to make it faster and faster, ultimately burning away energy and misallocating capital until the reward is exhausted, and then repeating each time a new generation of hardware is out.

Not quite, you're forgetting the T in HFT. If everyone was just buying securities a microsecond vs a millisecond might not matter much. What happens is a lot of HFTs act as market makers. They arbitrage positions they create which screws over any non-HFTs. It also moves the price of securities for no reason which affects everyone holding that security. There's also been plenty of cases of HFTs doing front-running and…

> It also moves the price of securities for no reason which affects everyone holding that security.

Huh? It's narrowing bid-ask spreads, which is beneficial to other market actors. There's nothing "artificial" in it other than betting that the price fundamentals won't move against them, like any other market maker.

Re: Intruder at the top of the 20 meter amateur band?

#106

Post by chordalkeyboard »

ska wrote: post #101
chordalkeyboard wrote: post #97

Earlier quoted context omitted.

its highly counterintuitive to see the modern system in the same terms as the capital markets of last millennium. and I'm convinced the system isn't perfect, I'm sure there are things that should be changed. I'm merely suggesting that the market sped up as people learned to do market stuff faster, and that market stuff is ultimately a process of allocating capital resources.

Ok, I get that - I don't think it really addresses my concern/question about whether or not this is far in the range of diminishing utility. Put it another way, if the number of HFT trades were suddenly cut in half, what 1st order impacts would be felt by people outside those markets? The heart of the "but we're providing liquidity" argument is that this is a service provided that has real value outside the market. I…

> far in the range of diminishing utility.

it probably is because of distortions in the flow of money

> Put it another way, if the number of HFT trades were suddenly cut in half, what 1st order impacts would be felt by people outside those markets?

it would probably result in capital markets taking longer to account for changes in the market/world such as shortages. Then the capital markets that weren't subject to the restriction would be more competitive as a whole. Depending on the specifics, it might open the door to people with relevant information (who weren't hf traders) to begin to make some of those trades.

> The heart of the "but we're providing liquidity" argument is that this is a service provided that has real value outside the market. If that's not true the particular argument falls apart, doesn't it?

I don't use the liquidity form of the argument because I think it focuses on the wrong things. Capital markets affect the rest of the markets by optimizing the creation and maintenance of capital. All consumer goods rely on capital. So policies that make the capital markets less efficient would have broad downstream effect in commodities markets, essentially there would be in aggregate fewer goods.

Re: Intruder at the top of the 20 meter amateur band?

#107

Post by erik_seaberg »

beervirus wrote: post #82
ajkjk wrote: post #26

I'm sure I'm not the only one who would like to see the whole HFT industry be deleted. What a waste of human intellect.

At least arbitrage provides some value by tightening bid/ask spreads. What about all the smart nerds who work on adtech instead of important problems? That's entirely irredeemable.

An awful lot of the web would go offline without that revenue.

Re: Intruder at the top of the 20 meter amateur band?

#108

Post by logotype »

alasdair_ wrote: post #77
tekkk wrote: post #72

Earlier quoted context omitted.

You're way off the mark with your examples. More appropriate ones would be military weapons, multi-level marketing, payday loan firms with ridiculous interest rates, scummy advertisement firms. You might not remember that in the Middle-Ages a large portion of intellectuals were spending most of their time debating religion such as is God really omnipotent and what a specific verse in Bible meant. Now sure you can arg…

>in the Middle-Ages a large portion of intellectuals were spending most of their time debating religion such as is God really omnipotent and what a specific verse in Bible meant. Right. And through all that thinking about silly stuff, people eventually came to the idea that a LOT of this religion stuff is silly and not worth wasting time on, so smart people could skip worrying about it for the rest of human existence…

Funny that you mention Renaissance, which happens to be the name of one of the major HFT firms, Renaissance Technologies

Re: Intruder at the top of the 20 meter amateur band?

#109

Post by meetups323 »

mikewarot wrote: post #69

Morality and outrage aside, we know where they are, and the format they are using, and they are in a fixed site. The real question is: How can we: 1> receive and regenerate the source bit stream 2> use that to exactly recreate the transmitted signal 3> synchronized with that signal, and 4> then use it to cancel out the interference?

"Hello FTC I'd like a license to intentionally destructively interfere with a separate, licensed, broadcast -- which form should I fill out?"

Re: Intruder at the top of the 20 meter amateur band?

#110

Post by matthewdgreen »

kortilla wrote: post #100
balthigor wrote: post #41

Earlier quoted context omitted.

> HFTs do not front run for fucks sake. It’s illegal ... This is objectively false. Cursing does not strengthen an argument. HFTs paid to jump the queue. It should be illegal but it is not. There are a number of low-latency strategies that are beneficial for price discovery such as index arbitrage or market-making (with requirements to stay in the market). A strategy that is not beneficial is to pay the exchange for…

First look is still not front running. Unless you are able to get your order in before other orders, it’s not front running. Get it? Being the first to look at new orders is nice, but the orders are in the queue so there is no way to get in front of them. Here is a link to help you: https://www.investopedia.com/terms/f/frontrunning.asp It’s very well-defined in the industry and when you complain about something compl…

Again, this is exactly the behavior I mentioned in the above post. When the general public raises the important question of how much extractive behavior there is in HFT and asks whether the benefits outweigh the value lost by disadvantaged parties, they get brushed off and told that they’re ignorant. Your response focuses on one specific technical allegation while casually admitting that yeah, maybe there’s another type of extractive behavior that happens but “don’t you know the difference between one technical definition of extractive behavior and another?” At the same time no actual answer is given to the core question — presumably the assumption being that unless you are in the HFT world you’re not qualified to have the question answered, even if it affects you and you’re paying for it.
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