Thoughts on low latency trading if exchanges went full cloud

How do you tie break? If there are more sellers than buyers (or vice versa) at the clearing price?

How would any cloud offering deal with something like, say, the full options data feed, which is close to 40 Gb/s of binary packed goodies? You need both a very fat pipe and ultra-low latency: does the cloud, any cloud, offer that?

Also: how often have you guys seen the stock market being down? What's the "x nines" availability of, say, the US stock market and US options feed?

Now: do we wanna talk about the various cloud outages that made the news? Sometimes lasting hours?

Also what I've seen with the cloud is websites are now displaying spinners everywhere, for the myriad of not-low-latency-at-all microservices often taking seconds to respond. And that'd be on an ultra low latency fiber to the home setup, with 2 Gb/s down (and the ISP really supporting that).

Why the heck do I have to wait seconds for oh-so-many things to display in my browser, on a last gen Ryzen ultra-speedy machine, with a super fat and low-latency Internet pipe? The worst offenders being all those banking websites showing a balance of 0 instead of "-" or "n/a" while fetching my info: nearly gives me heart attack every single time.

I take it it has to do with micro-services all contacting shitloads of other micro-services, all living in the not-low-latency cloud. The problem being compounded by an army, a generation, of programmers who have never learned anything about optimization or latency and who solve every problem they have with the only hammer they have: the cloud. All these programmers know are JSON (or, worse, XML)...

I mean: JSON vs 40 Gbit/s of interrupted bit-packed binary feeds? How could these two world ever reconcile?

Now I don't do HFT but I do trade options and I do it through a desktop app and that app also offers an API through which I can fetch prices, send orders, etc. It's a good old Java app. And it's more advanced than any website I've ever used.

Can we please not enshittify everything with countless micro-services and JSON files in the cloud?

The reason the GP is proposing it is because it limits price discovery.

IMO, if you have a problem with limiting it to 5 seconds long quanta, you are doing something wrong.

> All this HFT feels wasteful and bad for 'regular' human investors.

Quite the opposite, thanks to the tough competition the market makers are setting the bid/asks spreads as minimal as possible. Which leads to less costs for human investors, pension funds, insurance companies etc.

I used to be a market maker in the 90's before HFT took off. The margins we kept sometimes felt like a rip off but customers had no other choice but to accept them.

People who ask for transaction fees, forced delays in executing or whatever, tend to forget that these force market makers to increase their spreads, which means customers eventually pay the price.

and not having a for() loop doing multicast fanout in software

which sounds like what AWS Transit Gateway is