Someday the traders will be beaming neutrinos through the Earth.
[deleted]
Intruder at the top of the 20 meter amateur band?
171–180 of 187 posts
Re: Intruder at the top of the 20 meter amateur band?
#172Earlier quoted context omitted.
If not why do they need to have the lowest latency? Seems to me that if you want to provide liquidity what you need to do is buy a wide range of stocks and sit on them so they're all listed and available for trade. But you don't need extremely low latency for that. If you're providing liquidity you should be sitting on an insanely diverse portfolio at the end of every day. The whole point is to make sure trades are a…
When trading on exchanges no one can see your order before it makes it to the exchange, it’s literally a private connection directly to the exchange. Once your order hits the exchange 1 of 2 things can happen, your order can trade (that is it immediately clears) and all participants get an update which shows the new state of the exchange (the previous state minus whichever order(s) your order matched against). Or you…
> When trading on exchanges no one can see your order before it makes it to the exchange, it’s literally a private connection directly to the exchange.
If the stock market was only one marketplace that would be true, but when your order goes out to multiple marketplaces that's where the trouble starts.
Are you claiming that if you offer to buy 10 shares of X at $10, but the price drops to $9.99 while you are hitting "execute" the system isn't smart enough to let it happen and your $10 order will sit unfulfilled? And that the HFT folks are so kind in letting you save time by marking it up for you? What a valuable service that couldn't easily be provided by my own system... /s
Re: Intruder at the top of the 20 meter amateur band?
#173Earlier quoted context omitted.
When trading on exchanges no one can see your order before it makes it to the exchange, it’s literally a private connection directly to the exchange. Once your order hits the exchange 1 of 2 things can happen, your order can trade (that is it immediately clears) and all participants get an update which shows the new state of the exchange (the previous state minus whichever order(s) your order matched against). Or you…
> When trading on exchanges no one can see your order before it makes it to the exchange, it’s literally a private connection directly to the exchange. If the stock market was only one marketplace that would be true, but when your order goes out to multiple marketplaces that's where the trouble starts. Are you claiming that if you offer to buy 10 shares of X at $10, but the price drops to $9.99 while you are hitting…
Even in multiple exchanges orders are always private before they execute if you are trading on an exchange (if you are trading through another venue this may not be true but in those cases latency is not an issue as there is no race).
If you send an order to buy at $10 and the lowest sell price is $9.99 you will not rest an order you will be filled at $9.99 before any other exchange participant can see your order.
Orders rest when you offer to buy at $9.98 but the lowest sell price is $9.99. At that point if you are the first person at that price level you will be first in line when someone tries to sell at $9.98. Otherwise you will be last in line even if the person in front of you put their order in by mail a month ago.
Respectfully that you need these concepts explained to you means you don’t know even the basics of how this works so holding a vehement position on it is a bad look.
It’s akin to someone hearing that udp is a lossy protocol and railing about it existing at all.
Re: Intruder at the top of the 20 meter amateur band?
#174Earlier quoted context omitted.
> When trading on exchanges no one can see your order before it makes it to the exchange, it’s literally a private connection directly to the exchange. If the stock market was only one marketplace that would be true, but when your order goes out to multiple marketplaces that's where the trouble starts. Are you claiming that if you offer to buy 10 shares of X at $10, but the price drops to $9.99 while you are hitting…
Even in multiple exchanges orders are always private before they execute if you are trading on an exchange (if you are trading through another venue this may not be true but in those cases latency is not an issue as there is no race). If you send an order to buy at $10 and the lowest sell price is $9.99 you will not rest an order you will be filled at $9.99 before any other exchange participant can see your order. Or…
Those were rhetorical questions. They were meant to show how silly the concept of "offering liquidity" is as a service. Nobody asked for it, but they can't opt out without doing crazy workarounds like delaying orders to different market to avoid giving away their trade information to front runners.
Re: Intruder at the top of the 20 meter amateur band?
#175Earlier quoted context omitted.
Even in multiple exchanges orders are always private before they execute if you are trading on an exchange (if you are trading through another venue this may not be true but in those cases latency is not an issue as there is no race). If you send an order to buy at $10 and the lowest sell price is $9.99 you will not rest an order you will be filled at $9.99 before any other exchange participant can see your order. Or…
Those were rhetorical questions. They were meant to show how silly the concept of "offering liquidity" is as a service. Nobody asked for it, but they can't opt out without doing crazy workarounds like delaying orders to different market to avoid giving away their trade information to front runners.
In my previous example if the highest sell price is $9.99 and you offer to buy at 9.98 you are “offering liquidity”.
It’s not a service that’s on offer it’s a fundamental market behavior that any participant can engage in.
Re: Intruder at the top of the 20 meter amateur band?
#176I'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.
What about race cars and the insane amount of money spent improving them? There is no social benefit in the sense you are talking. What about the advertising industry, making up slogans and jingles that you can't get out of your head? I think you might misunderstand the mechanisms behind the stock market and thus the value provided by the HFT industry.
not saying that every industry should have a social benefit. Just that HFT is uniquely and excessively terrible and pointless and should die.
I think you are assuming that anyone who criticizes HFT must be clueless about how finance works because you can't imagine any other reason they would criticize it. Look around, that's not true.
Re: Intruder at the top of the 20 meter amateur band?
#177Earlier quoted context omitted.
Just because something has benefit, doesn't mean the benefit outweighs the cost. Specifically we are talking about the opportunity cost of other valuable things these people could be creating. Obviously this can be difficult to measure.
That's not a terribly strong argument. Should we ban making chocolate as well? Sports? Art? After all, these people could surely be creating something more valuable. If you want to make an argument based on opportunity cost, it generally should have specific alternatives and a viable cost metric. Without that, it's not an argument, just an opinion.
Actually, I somewhat agree with you. In the interest of time, I had to just stop at "Obviously, this can be difficult to measure". I find this allocation of resources problem very interesting, but I don't claim to know the answer. You can even flip it around the other way and say "Actually there really isn't anything more valuable they could be doing." It sure seems however there is a ton of brain power being used for things that would benefit society more elsewhere, but who knows.
Re: Intruder at the top of the 20 meter amateur band?
#178Earlier quoted context omitted.
> 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. And that lead to establishing a whole new field of social sciences that is philosophy. Yes, i am aware that middle-age debates and musings like that were not solely responsible for philosophy as a field of study,…
Philosophy is much older than middle age religious debates.
Absolutely agreed, it goes at least as far (if not further) as ancient Greece.
Just wanted to highlight that specific time period, since it was pointed out by the parent comment as a specific example of those efforts going nowhere.
Re: Intruder at the top of the 20 meter amateur band?
#179Earlier quoted context omitted.
Those were rhetorical questions. They were meant to show how silly the concept of "offering liquidity" is as a service. Nobody asked for it, but they can't opt out without doing crazy workarounds like delaying orders to different market to avoid giving away their trade information to front runners.
In my previous example if the highest sell price is $9.99 and you offer to buy at 9.98 you are “offering liquidity”. It’s not a service that’s on offer it’s a fundamental market behavior that any participant can engage in.
Right, which is what I was talking about in the original post.
You don't need ultra-low latency to put in that $9.98 order to keep the market moving. If you were serious about providing liquidity you'd have tons of bids and offers open all the time. You would be holding tons of stock at the end of the day by the nature of the business.
HFT firms tell you that they are making life easier for traditional investors by providing liquidity, but that doesn't make much sense given how they operate.
Re: Intruder at the top of the 20 meter amateur band?
#180Earlier 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…
I was in the industry (prop trading at BofA). I am no more ignorant than you. Here is a link to help you.
https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article...