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SEC approves Texas Stock Exchange, first new US integrated exchange in decades

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Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#321

Post by JumpCrisscross »

robocat wrote: post #130
SkipperCat wrote: post #13

The Miami stock exchange (MIAX) has their matching engines colocated in Equinix's NY4 data center in Secaucus NJ, much like many other exchanges. I would not be surprised if TXSE does the same. Many trading firms already have their trading engines in that data center and I would assume TXSE would want quick access to that order flow and this might be easier if they are in NY4. Of course, they may want to have their c…

> I would assume TXSE would want quick access to that order flow Perhaps Texas could use a different trading model that doesn't require ultra high speed trading. Matt Levine often mulls the idea of a system with a trading window that doesn't let the fastest connection to the order book win. Perhaps an order book that works at human speeds so humans can trade too (I can think of a few ways to do it - but would need mo…

> Perhaps Texas could use a different trading model that doesn't require ultra high speed trading

Wall Street (as in the sell side) is strongly incentivised to stamp out high-speed trading. It undercuts their dealer model. They have tried and failed to come up with an auction model that eliminates HFT without tradeoffs that real investors find unacceptable.

Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#322

Post by caminante »

dylan604 wrote: post #310
caminante wrote: post #301

Earlier quoted context omitted.

I wasn't looking for conspiracies and disconnected facts (i.e., flash flood through a rural, summer camp). Dallas was a T5 datacenter hub before Uri in 2021 and did well during the storm because they were designed to service level guarantees [0]. It's also silly to claim that TXSE's performance is disconnected from serious TX investors. [0] https://www.datacenterdynamics.com/en/analysis/how-data-cent...

What conspiracies? These are actual things that happened delivered as a sarcastic dialog that goes to show how the government in Texas behaves. Also, I never claimed anything about investors of TXSE. At the end of the day, it doesn't matter where an SE's data centers are located. They will all need redundancy plans. If you think Texas is a better location than other sites, then you have to focus on what have historic…

I get you're heated about Texas politics.

I'm afraid your comments just come off as an attack on local politicians and their priorities, not the topic of addressing whether TXSE could be more resilient than peers.

Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#323

Post by JumpCrisscross »

Fade_Dance wrote: post #309
snowwrestler wrote: post #257

Earlier quoted context omitted.

Bit of an aside, but I really do not understand the concerns with trading speed. I can trade at human speed now: when I want to make a trade, I put in the order and it gets executed. Speed elsewhere in the market makes it easier , not harder, for me to trade when I want to. And I don’t care who my counterparty is; that’s a fundamental feature of a stock exchange. If A is always faster than B because A is 2 racks clos…

>How does that hurt me? Because lit orders get front run. Every sophisticated participant/algo is exceptionally efficient at extracting money from less sophisticated participants. As someone who trades decent volume but doesn't have a fully institutional grade workflow, I have the fortune of dealing with this... Simple lit orders (posting an order directly to an exchange) will be taking advantage of by both market ma…

> lit orders get front run. Every sophisticated participant/algo is exceptionally efficient at extracting money from less sophisticated participants

Anyone executing via lit orders is either forced to do so or an idiot. That’s why most of the market doesn’t execute via lit orders. Which is fine. The trade is still reported ex post facto, and the inefficiencies this creates are always less than the convoluted auction formats one must use to make low latency non-advantageous.

Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#324

Post by JumpCrisscross »

throwawaymaths wrote: post #196
robocat wrote: post #130

Earlier quoted context omitted.

> I would assume TXSE would want quick access to that order flow Perhaps Texas could use a different trading model that doesn't require ultra high speed trading. Matt Levine often mulls the idea of a system with a trading window that doesn't let the fastest connection to the order book win. Perhaps an order book that works at human speeds so humans can trade too (I can think of a few ways to do it - but would need mo…

Just make all positions irrevocable for at least 10 seconds after posting.

> Just make all positions irrevocable for at least 10 seconds after posting

Sounds great for Wall Street. Spreads would necessarily widen as people buffer out. Meanwhile, you’ve turned every lit order into a 10-second option for market participants. Which means there is still a latency advantage to lifting or hitting a standing order first.

Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#325

Post by resters »

CyberDildonics wrote: post #314
resters wrote: post #312

Earlier quoted context omitted.

I think you are letting your "speculation is bad" bias interfere with your understanding of dynamical systems.

I think you're hallucinating something I didn't say to avoid confronting what I did say. Also what's the difference between a system, a dynamic system and a 'dynamical' system?

The behavior of other participants is itself a first-class signal.

Rule 611 compresses that signal. By forcing everything to orbit a size-agnostic NBBO, it collapses a lot of the “behavioral bandwidth” (depth, imbalance, sweep patterns, replenishment, cancel/replace cadence) into a single top-of-book tick. Less resolution, less information.

High-resolution flow tells you who wants what, at what size, and how urgently. When we gate execution through protected quotes, we encourage tactics that flick the top-of-book with tiny size and discourage truthful size revelation. That’s signal destruction dressed up as protection.

Letting informed counterparties print away from the protected price (to reflect size or information) increases informational content. You get cleaner read-through from actual willingness to trade, instead of a compliance-driven dance around a fragile benchmark.

So yes: other people’s actions are the best data feed. The more of that behavior we can see—in size, time, and venue—the better our discovery gets. 611 reduces that visibility by design.

Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#326

Post by brcmthrowaway »

chronic74939 wrote: post #11
viraptor wrote: post #3

> world-class exchange rooted in alignment Does this actually mean something specific?

> Does this actually mean something specific? Probably: Trade matching algorithms (prorata, FIFO, TOP) and rules (capital requirements, market impact definitions) will align with the interests of the most profitable customers. Citadel Securities, with their HFT-level returns of 50-100% per year will not venture into a losing business. Note, CitSec is different from Citadel (hedge fund), and the hedge fund is also cra…

How does this compare to HRT?

Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#327

Post by tomrod »

reducesuffering wrote: post #224
tomrod wrote: post #223

Earlier quoted context omitted.

All true. Texas worker environment is not great though. Folks typically list income tax as an advantage but property and sales taxes more than make up the difference. Also, govt admin is fairly hostile to any infrastructure expansion, preferring to let the local car dealers buy new town charters with no infrastructure. Environmental regs are not well managed generally. Anyhow, not the worst state, not the best. Prett…

> Folks typically list income tax as an advantage but property and sales taxes more than make up the difference. No, not really. Texas is still below average state taxes and you can see the breakdown of each state here: https://en.wikipedia.org/wiki/State_income_tax#/media/File:S...

Yep, exactly what I mentioned, more than makes up for it especially once you factor in the higher Case Schiller on recent years causing increases to property taxes since 2022 (date of your image).

Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#328

Post by smallmancontrov »

JumpCrisscross wrote: post #321
robocat wrote: post #130

Earlier quoted context omitted.

> I would assume TXSE would want quick access to that order flow Perhaps Texas could use a different trading model that doesn't require ultra high speed trading. Matt Levine often mulls the idea of a system with a trading window that doesn't let the fastest connection to the order book win. Perhaps an order book that works at human speeds so humans can trade too (I can think of a few ways to do it - but would need mo…

> Perhaps Texas could use a different trading model that doesn't require ultra high speed trading Wall Street (as in the sell side) is strongly incentivised to stamp out high-speed trading. It undercuts their dealer model. They have tried and failed to come up with an auction model that eliminates HFT without tradeoffs that real investors find unacceptable.

Didn't HFT compete itself out of outsized profitability years ago? So now we get instant super liquidity for pennies?

Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#329

Post by CyberDildonics »

JumpCrisscross wrote: post #320
CyberDildonics wrote: post #316

Earlier quoted context omitted.

> My millionth of a second is different than yours, and everyone else’s. No it isn't. > I want the transaction to happen as quickly as possible. So does everyone else. Your monitor refresh is about 16,000 times slower so you aren't going to know. The only reason you need something faster is because you think you have to compete with other people trading on microseconds. If matches happened at 1 second intervals you w…

> If matches happened at 1 second intervals you wouldn't have to worry about it at all This is nonsense. There is still advantage to submitting your trade as close to that settlement deadline as possible.

Not so much if the submitted prices are hidden until the matches are resolved.

Re: SEC approves Texas Stock Exchange, first new US integrated exchange in decades

#330

Post by Mr-Frog »

ergocoder wrote: post #267

I always wonder why an economic powerhouse like California or Washington doesn't have its own stock exchange. Maybe it is the strict regulation that makes it not viable?

There used to be a variety of exchanges on the West Coast but it seems like they couldn't compete with the automation and HFT innovation happening in NYC, all the west coast engineers were too busy with the dot-com bubble it seems.
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