Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

cbsnews.com

Post reply on HN
Print view View original

351–360 of 493 posts

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

#351

Post by anonu »

UltraSane wrote: post #263
resters wrote: post #253

Earlier quoted context omitted.

Reg NMS’s Order Protection Rule (Rule 611) says you can’t trade through protected NBBO quotes, outside a few narrow exceptions. That’s the letter of the law. The practical effect isn’t just a bit of latency. It rewires incentives. With 611 in place, the question for latency-sensitive firms becomes: what HFT tactics can I run that are 611-compatible? Without 611, the question would be: what HFT tactics actually add va…

There is no reason why shares should be bought on sold in time frames far too short for anything to have meaningfully changed about the companies or market conditions.

This is the free market speaking. If there was one exchange there would be ~no~ less latency arbitrage. But there are many... Which creates a competitive landscape and reduces fees for investors. The by product is you have many HFTs that come in to take advantage of mispricings, even if they are on sub millisecond scales. It doesn't harm the company or the investor. Its quite the opposite... Investors benefit from competition amongst exchanges and HFTs.

In addition you have redundancy in the markets system. Exchanges are important for national security... Having everything centralized would risk people's retirements, savings, and more

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

#352

Post by anonu »

javier123454321 wrote: post #89

Pardon my ignorance but can anyone can help me figure out what does it mean to have a new stock exchange? Dont exchanges sell the same stocks? Is it just a way to earn some fees by capturing some of the trades in their platform? I'll obviously google it now but I'd appreciate some insight.

In this case it's a marketing ploy for the state of Texas and also a way for Schwab, citadel, blackrock and fortress to press their finger on the balance of power which is far tilted towards the ICE.

Also note Schwab is headquartered in Texas and they account for a significant percentage of trading in the US on a daily basis.

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

#353

Post by anonu »

bluGill wrote: post #111
javier123454321 wrote: post #89

Pardon my ignorance but can anyone can help me figure out what does it mean to have a new stock exchange? Dont exchanges sell the same stocks? Is it just a way to earn some fees by capturing some of the trades in their platform? I'll obviously google it now but I'd appreciate some insight.

> Dont exchanges sell the same stocks? No. Each company chooses what exchange their stock is sold on. Sometimes (often for large companies) you are on more then one exchange, but never all of them. Nothings stops an exchange (laws may not allow this but remember exchanges are in many countries and only subject to the laws of their country) from handling stock that the company doesn't want on them, but the value of an…

Loose language here: in the US you choose which exchange you want to be your primary listing. Listed securities can and usually do trade on all exchanges. Exchanges have different liquidity profiles and market makers. The rules are enforced to ensure that you can send an order to any exchange and you should always get the best price even if it's on another exchange. During regular market hours...

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

#354

Post by quickthrowman »

sgc wrote: post #250
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 rather see an exchange that requires buyers to hold their shares for at least x days or weeks, and slow everything way down so that people are actually forced to make decisions based on fundamentals rather than trading based on jitters in market movement. Then the datacenter location is almost irrelevant.

You can construct a synthetic long or short position with options [0], so those would need to be removed as well. Options are much too useful for market participants (market makers in particular), so your idea is dead in the water.

[0] For US equity options, if you sell a put and simultaneously buy a call at the same strike price, you have a synthetic long that acts like owning 100 shares of the underlying asset (no dividends, but that’s already priced in to the options).

Buy a put and simultaneously sell a call at the same strike price and you have a synthetic short that acts like being short 100 shares of the underlying asset.

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

#355

Post by Razengan »

UltraSane wrote: post #263
resters wrote: post #253

Earlier quoted context omitted.

Reg NMS’s Order Protection Rule (Rule 611) says you can’t trade through protected NBBO quotes, outside a few narrow exceptions. That’s the letter of the law. The practical effect isn’t just a bit of latency. It rewires incentives. With 611 in place, the question for latency-sensitive firms becomes: what HFT tactics can I run that are 611-compatible? Without 611, the question would be: what HFT tactics actually add va…

There is no reason why shares should be bought on sold in time frames far too short for anything to have meaningfully changed about the companies or market conditions.

hah someone finally said it. The financial market or whatever the f it's called has become a Monty Python sketch. Like those "pro" StarCraft gamers that keep randomly clicking their mouse for no reason except to keep their APM counter high.

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

#356

Post by CGMthrowaway »

calmoo wrote: post #341
munk-a wrote: post #304

Earlier quoted context omitted.

Ideally you're correct - but it does have the very large side effect of making real estate fraud much more lucrative. This isn't to say that the potential of people breaking a law means we shouldn't have the law at all - but higher property taxes necessitate a much large spend into property value auditors and require a lot more stringency around property improvement permitting to ensure that increases in property val…

How much fraud we talking? I like to think along Matt Levine's ideas that at least some amount of fraud is acceptable - there will always be some amount of it and under or over-regulation creates a net-negative.

Tough to measure. A couple data points:

-NY state estimate $150–200M per year lost to real estate transfer tax fraud and evasion. On $3B receipts that is 5-6% breakage.

-Harris County (Houston) found $21M in improper homestead exemptions. On ~$7B receipts that is ~0.3% breakage

-Miami-Dade found $35M on $6.5B for improper homestead exemptions, 0.5% breakage

For comparison, IRS net tax gap is about 12%

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

#357

Post by JumpCrisscross »

throwawaymaths wrote: post #348
JumpCrisscross wrote: post #324

Earlier quoted context omitted.

> 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.

only if you make those bids visible. the bids are held in a buffer and at the end of the buffer, it either completes a trade or appears on the order book. iirc some market tried to do this with a literal loop with a physical latency.

> only if you make those bids visible. the bids are held in a buffer and at the end of the buffer

Everyone else's bids are invisible. The ones you submit--for your self and for your customers--are not. The larger a brokerage operation you run, the more of an edge you get under this system.

We created the unified tape and passed Rule NMS specifically to remove these incentives.

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

#358

Post by infecto »

fijiaarone wrote: post #297
infecto wrote: post #232

Earlier quoted context omitted.

That’s what always surprises me when folks bring this up. Nobody in the market cares. Institutional investor experience some of the lowest trading cost in history. These complaints are most often coming from retail traders where again I don’t follow the argument. Instead of some guy on the floor picking up dollars with have machines picking up pennies. This is a win for everyone.

Nobody in the market cares because everyone in the market are cheaters. There is a huge untapped potential of people outside the current market that do not participate because they know the market is rigged against them. A fair market could be huge, but the trick is keeping it fair. It used to be more fair, and we used to have a healthier economy because of it. It’s not like most of the unfairness in the current mark…

Hyperbole, hyperbole, hyperbole. Define more fair. Spreads are some of the lowest they have been in history.

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

#359

Post by sgc »

quickthrowman wrote: post #354
sgc wrote: post #250

Earlier quoted context omitted.

I would rather see an exchange that requires buyers to hold their shares for at least x days or weeks, and slow everything way down so that people are actually forced to make decisions based on fundamentals rather than trading based on jitters in market movement. Then the datacenter location is almost irrelevant.

You can construct a synthetic long or short position with options [0], so those would need to be removed as well. Options are much too useful for market participants (market makers in particular), so your idea is dead in the water. [0] For US equity options, if you sell a put and simultaneously buy a call at the same strike price, you have a synthetic long that acts like owning 100 shares of the underlying asset (no…

The proposal is because I don't think a bunch of people playing games with money provide any sort of value. If you could only buy a valuable company in such a way that options and HFT trades were excluded, then you would just have to invest in the company and support its growth. That is the goal of the structure. I completely agree with you: If the bloodsuckers don't have to do so, they never will. I would prefer it were law, but second best would be a place where companies could opt out of the anti-culture of wall street and still be publicly traded.

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

#360

Post by sgc »

wbl wrote: post #283
sgc wrote: post #250

Earlier quoted context omitted.

I would rather see an exchange that requires buyers to hold their shares for at least x days or weeks, and slow everything way down so that people are actually forced to make decisions based on fundamentals rather than trading based on jitters in market movement. Then the datacenter location is almost irrelevant.

You don't want that unless you want to wait days to trade.

That is the point. So much stock market activity is just gambling with a lot of veneer to cover it up. Enough with the games.
Post reply on HN