Earlier quoted context omitted.
Then you took an arrow to the knee?
Please try to keep comments constructive on Hacker News. Memes and other forms of joke regurgitation don't really fit in here.
I would say the same to you.
Someone got the natural gas report 400 ms early
271–280 of 291 posts
Re: Someone got the natural gas report 400 ms early
#272Earlier quoted context omitted.
Will laws work? I imagine the big investment banks will just set up dark pools in countries with favorable laws and just trade there instead. Added benefit: no more taxes! The solution is to realize that high-frequency traders are playing a different game than you, even though they're on the same playing field. They do weird things but it's probably not hurting your returns. (It wasn't HFT that imploded the big banks…
They do weird things but it's probably not hurting your returns. I'm not so sure. The financial system is a nonlinear dynamical system. The hallmark of such systems is that small local perturbations can lead to very large changes in system-wide state. High-frequency trading vastly increases the number of small perturbations, and while most remain local, there is a finite probability that some will percolate upward in…
i think that is nonsense.
Re: Someone got the natural gas report 400 ms early
#273Earlier quoted context omitted.
> Small investors can only buy on bad news and long where applicable (i.e good company). Bad news and poor technical performance even if for a period is guaranteed almost to be driven down by HFT. And sometimes HFT over does it (maybe on purpose to let the suckers flood back in). I.e. Apple going to 430, Netflix to mid 50s after similar shorts/run ups and battle of machines. I think Apple's a weird case. They had a "…
That's not a weird case, that's fairly classic (though utterly irrational) market behaviour.
apple will go lower in the next 12 months, and it has nothing to do with HFT
Re: Someone got the natural gas report 400 ms early
#274you guys remember the uproar that the telegraph caused in the trading community? the street has never recovered.
Re: Someone got the natural gas report 400 ms early
#275Earlier quoted context omitted.
But you can make processes more efficient and add more value with less human interaction. Consider Amazon vs. your local mom and pop grocery.
> add more value with less human interaction // This sounds like an oxymoron. Financial efficiency and value often appear to be at odds. Amazon certainly appear to spend less resources in the delivery of goods. Low cost of acquisition isn't necessarily correlated with greater value in terms of human fulfilment. I've often wondered why we don't have [more/widespread] community kitchens, less work needed for food produ…
The short answer is "be the change you want to see in the world"
The long answer is a consumer's collective. If you are in the US a good example are the credit unions, where fees (of all kinds) largely don't exist. In the US, Consumer's Collectives legally have a democratic corporate structure. Private corporations legally are more like a dictatorship. Public corporations have a board of directors and are legally more like an oligarchy (unless one single person constitutes most of the board).
Re: Someone got the natural gas report 400 ms early
#276Earlier quoted context omitted.
The data are printed with the CME's and NYSE's official timestamps. It would not be unprecedented for the CME's timestamps to diverge from, say, the NYSE's. That would present itself as a consistent temporal dislocation between the CME and NYSE, but would be invisible within each data-set (sort of like your calendar putting itself into the wrong time-zone where - the times are off, but they're consistently off, i.e.…
What I find amazing is that a government agency managed to publish a report at a specific time, to the millisecond, using somebody else's clock.
The clock's probably derived from GPS or NIST or USNO anyway, so it actually is the government's clock.
Re: Someone got the natural gas report 400 ms early
#277Earlier quoted context omitted.
To give an example of how this could happen (not saying this is what happened, but I've heard this happened before): Suppose you left ntpd running and automatically adjusting the clock every hour. If your clock is running faster than pool.ntp.org, and you are synchronizing to it, you may end up adjusting in the middle of an event. Because your clock is running fast, you would jump back in time, breaking the sequence…
My understanding is that ntpd corrects clock drift by replaying milliseconds consecutively, not by actually jumping back. However I can't remember where I read that and could be totally wrong.
I'm sure there are lots of buggy NTP implementations out there that "adjust the clock every hour", but the way it's supposed to work is by continuously varying the speed of the clock (for example, using adjtime()) to correct any discrepancies. At no point should the clock jump backwards or forwards, or even have milliseconds that are more than X percent longer or shorter than usual.
Re: Someone got the natural gas report 400 ms early
#278Earlier quoted context omitted.
This is such utter bullshit. Markets are being programmatically gamed , and seriously bright young minds are still flocking to the Vampire Squid's embrace, hoping for a chance to help them do that in exchange for a slice of that phat, fraudulent loot.
it's not any worse than using javascript to further the ad industry
Well yes, both are bad, of course.
The ad industry's efforts have led to online privacy being all but non-existent, but Wall Street has turned our economies into shit and saddled the world with massive amounts of debt that will never be repaid.
But you can consider the ad industry far more "innocent" than Wall Street. The latter has known exactly what it's doing and causing all along.
Re: Someone got the natural gas report 400 ms early
#279Is there some kind of wargame where we could all write little algorithms to trade/compete with one another for a couple minutes, and then check the winners/learn strategies?
Re: Someone got the natural gas report 400 ms early
#280Earlier quoted context omitted.
>As a generality I'd say that's false. Why buy in to a system Because it gives you a better price. There are two sides to any trade; people go to the HFTs because their prices are better than anyone else's. If they weren't providing value, no-one else would trade with them. > that makes a tiny proportion of the populous vastly wealthy only because those people already are wealthy. HFT has greatly democratized market-…
> Where's the value being "extracted" from? // > there's always $0.005/share to be made on every trade // I [clearly] don't know enough to know if you're exactly right, but lower the latency and increase the trades and there you have it. Aren't bids and offers listed in pips (like $1.4032). As I see it production, processing, administration, etc. are the only value inputs. When a 400ms glitch extracts something of th…
>lower the latency and increase the trades and there you have it
It is true that lowering the latency and more to the point narrowing the spreads increases trade volume, which I kind of glossed over, but again if you lower your margins and sell more of your product you're not extracting value but creating it. Fundamentals traders are (hopefully) buying and selling shares for good reason; helping them do it quicker and more cheaply is a good thing.
>Aren't bids and offers listed in pips (like $1.4032)
AIUI there's an exception for low-value shares, but most are required to be sold in increments of $0.01. (Of course that only applies to stocks traded on public exchanges, which is by no means all or even most HFT activity)
>As I see it production, processing, administration, etc. are the only value inputs. When a 400ms glitch extracts something of the order 1e5 USD the value that money represents comes from those inputs. Yes liquidity is an administrative input but the way the system is set up trades appear to extract far greater amounts of money than their value to society; of course that money comes from other investors, but money is not value, the value the money ineffectively represents is brought to the system by those said inputs.
You're right that there's a kind of "tragedy of the commons" going on; because there's that massive $0.005/share to be made and free competition on latency to be the company to get it, the competing companies naturally push harder and harder until they're all spending $0.004999/share on FPGA programming and the smartest employees they can find to get that $0.005. But it is at least kind of circumscribed; it's that fixed (ish) quantity of money getting wasted, nothing more.
>The problem appears to be that those in a position to rectify the aberration are too busy getting rich off it to care.
Maybe. I've seen elsewhere in these comments that large institutions are now trading directly with HFT players like GETCO and Knight, because they can offer better prices (narrower spreads - less than $0.01) there than they can publicly. These guys are now doing their own trade crossing, effectively acting as a private exchange - and competition between these private exchanges will make the spreads narrower still, and reduce the rents the market makers get. Of course, there are all the downsides of a private exchange - without a public order book it's a shark pool in the same way as the bond market.