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

401–410 of 493 posts

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

#401

Post by KPGv2 »

CyberDildonics wrote: post #390
JumpCrisscross wrote: post #335

Earlier quoted context omitted.

> Not so much if the submitted prices are hidden until the matches are resolved Except every other exchange is still revolving. The only way to implement this is to eliminate competition between exchanges. Also, Wall Street would love this. The more of the order book you submitted, the more information you have about its composition.

The only way to implement this is to eliminate competition between exchanges. There are two different things being talked about here. Trading based on arbitrage between exchanges will happen in one way or another no matter what. Trading millions of times per second automatically on the same exchange when some people have low latency computers at the exchange with huge amounts of extra information is not necessary. Al…

> The point isn't to make something 'wall street hates' it's to make something that doesn't get money eaten away by automated computers in the middle so that it's the best option for people making trading decisions on people time scales.

Why is this desirable? It seems like an argument designed only to serve the interests of a small class of person who insists on doing manual trades themselves.

The rest of what you've written just sounds like "I lost money because computers are better than me at the task." I'm not sympathetic to that concern. Computers are better than me at lots of things, so I just don't try to compete at those things. I pay people with access to the computers to do them for me, and then I focus on the things I'm good at instead. Division of labor and all that.

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

#402

Post by KPGv2 »

UltraSane wrote: post #365
resters wrote: post #346

Earlier quoted context omitted.

This is the “speculation is bad” take with a side of naïveté about how markets work. Open an order book. Prices and quantities aren’t decoration; they’re live telemetry for supply, demand, and how tight the crowd’s consensus is at each level. That’s information, full stop. A human (or machine) trader forms a view of fair value against that tape. The book helps decide how to trade—size, urgency, venue—regardless of mo…

Millisecond trading strategies have zero relationship to information about companies or economic fundamentals and are therfore not economically productive. They're exploiting microstructure inefficiencies like latency arbitrage, order front-running, not price discovery. That's not 'teaching' the market it's a tax on everyone else's execution. The fact that it's legal doesn't make it structurally useful. It is just a…

> Millisecond trading strategies have zero relationship to information about companies or economic fundamentals and are therfore not economically productive

It is not clear to me that the only economically productive information is "information about companies or economic fundamentals."

If I know some idiot is willing to pay 100x what a company is actually worth, that is economically productive because it gives me, someone better with money, a ton of resources that formerly were controlled by someone who didn't know how to leverage the assets in an economically productive manner. IT's the same argument as allowing adverse possession: transfer of assets from non-productive owners to productive owners, benefiting society as a whole.

With this, I've established a third kind of data beyond "economic fundamentals" and "information about companies."

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

#403

Post by KPGv2 »

UltraSane wrote: post #362
Razengan wrote: post #355

Earlier quoted context omitted.

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.

Notice how no one actually has a good reason for why shares should be bought and sold in milliseconds?

It's exhausting to see good reasons offered and then y'all proudly failing to understand those reasons. Like, there are literally multiple comments here explaining it.

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

#404

Post by CyberDildonics »

KPGv2 wrote: post #400
CyberDildonics wrote: post #331

Earlier quoted context omitted.

the better our discovery gets The better the computers hooked directly into the exchange get you mean.

> The better the computers hooked directly into the exchange get you mean. I need you to understand that HFT makes decisions based on human-defined parameters. It's not AI-driven. What's the difference between a human saying "these are my parameters, now CPU, go trade based off those" versus "these are my parameters, now underling, go trade based off those" the only difference is speed, plus i suppose those underling…

I need you to understand that HFT makes decisions based on human-defined parameters. It's not AI-driven.

You need me to understand something I never said anything about? No one said AI.

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

#405

Post by UltraSane »

KPGv2 wrote: post #402
UltraSane wrote: post #365

Earlier quoted context omitted.

Millisecond trading strategies have zero relationship to information about companies or economic fundamentals and are therfore not economically productive. They're exploiting microstructure inefficiencies like latency arbitrage, order front-running, not price discovery. That's not 'teaching' the market it's a tax on everyone else's execution. The fact that it's legal doesn't make it structurally useful. It is just a…

> Millisecond trading strategies have zero relationship to information about companies or economic fundamentals and are therfore not economically productive It is not clear to me that the only economically productive information is "information about companies or economic fundamentals." If I know some idiot is willing to pay 100x what a company is actually worth, that is economically productive because it gives me, s…

I'm not sure what your comment has to do with HFT

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

#406

Post by JumpCrisscross »

Fade_Dance wrote: post #369
JumpCrisscross wrote: post #323

Earlier quoted context omitted.

> 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…

On net I'd agree, with the caveat that the hyper speed liquidity comes at the cost of fragility. Liquidity that can disappear in a microsecond can and does amplify market shocks. As for retail execution, while on net there's a standard and strong argument that a less regulated market is the most efficient, retail execution is most definitely at the bottom of the totem pole, with an order shopped around to parties tha…

> while slower speed participants have an improved experience

Wall Street lobbies to ban HFT every few years, hoping people who don’t like how it looks will back them up.

Slower participants in equities are block traders. Folks moving hundreds of millions if not billions at a time. Large institutional investors. Dealers. Retail, on the other hand, would get hosed, though it would also become much more profitable to execute, so maybe that brings some service perks for larger retail traders.

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

#407

Post by JumpCrisscross »

CyberDildonics wrote: post #390
JumpCrisscross wrote: post #335

Earlier quoted context omitted.

> Not so much if the submitted prices are hidden until the matches are resolved Except every other exchange is still revolving. The only way to implement this is to eliminate competition between exchanges. Also, Wall Street would love this. The more of the order book you submitted, the more information you have about its composition.

The only way to implement this is to eliminate competition between exchanges. There are two different things being talked about here. Trading based on arbitrage between exchanges will happen in one way or another no matter what. Trading millions of times per second automatically on the same exchange when some people have low latency computers at the exchange with huge amounts of extra information is not necessary. Al…

> point isn't to make something 'wall street hates' it's to make something that doesn't get money eaten away by automated computers

Wall Street lobbies to ban HFT because HFT’s computers eat away less than traditional dealers would.

Retail investors railing against HFTs are sort of like those San Francisco types who protest new development to the benefit of their landlords.

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

#409

Post by UltraSane »

KPGv2 wrote: post #401
CyberDildonics wrote: post #390

Earlier quoted context omitted.

The only way to implement this is to eliminate competition between exchanges. There are two different things being talked about here. Trading based on arbitrage between exchanges will happen in one way or another no matter what. Trading millions of times per second automatically on the same exchange when some people have low latency computers at the exchange with huge amounts of extra information is not necessary. Al…

> The point isn't to make something 'wall street hates' it's to make something that doesn't get money eaten away by automated computers in the middle so that it's the best option for people making trading decisions on people time scales. Why is this desirable? It seems like an argument designed only to serve the interests of a small class of person who insists on doing manual trades themselves. The rest of what you'v…

Anyone who isn't involved in HFT should be in favor of rules that slow down trades to human time scales. HFT currently favors a small class of rich people.

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

#410

Post by fnordpiglet »

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.

Except for the fact that people don’t know what the price is even with all available knowledge. HFTs serve a pretty useful function in converging to a discovered price the market can bear continuously. Prior to HFT markets were generally less stable on their pricing and liquidity was much worse. The fact you can basically trade at any time on anything instantly is made possible by HFT.

I look at them as providing a service like an energy exchange does in ensuring power distributes evenly and regularly across a region across providers and grids. They clip a fee in the middle but they provide a service in stable supply and prices.

This doesn’t mean automation isn’t without risk, and like an energy exchange, when things go badly they can go very badly. But by and large you never notice either the HFT or the energy exchange while you benefit from their existence.

Post reply on HN