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All comments so far are negative, but I fail to see how this video shows anything other than incredible engineering. The negativity seems to be a result of previous bias.
I cannot see a downside to improved networking infrastructure...and an eager market for advances.
All comments so far are negative, but I fail to see how this video shows anything other than incredible engineering. The negativity seems to be a result of previous bias.
If they arranged the machines on the horizontal axis, time on the vertical axis, and showed 'packet sent' events it would look much simpler. Maybe simple enough to add in details about the trades, like dollar values, instead of pretty expanding explosions.
Earlier quoted context omitted.
As someone who's not too familiar with economics, how is HFT supposed to be good for the economy?
If you want to buy/sell at a price, and there's no one ready to sell/buy at that price, a speculator (of any stripe) coming in and making that deal with you means you got the price you asked for. Maybe you could have got better - that's what the speculator is hoping - but you're no longer taking that risk. Statistically, the money going to the trader is similar to an insurance premium then. That's all "in principle"…
It's not like the order book for Johnson and Johnson is completely empty and there is absolutely nobody out there willing to sell shares. If I understand it right, the HFT machines are poking numbers around the current price trying to step ahead of a regular order before it comes in.
"The following animated GIF chronicles the rise of the HFT Algo Machines from January 2007 through January 2012."
All comments so far are negative, but I fail to see how this video shows anything other than incredible engineering. The negativity seems to be a result of previous bias.
It is incredible engineering and it has incredible downsides, not the least of which is the ability to destroy a market in seconds, due to a blip in information, with cascading domino effects.
All comments so far are negative, but I fail to see how this video shows anything other than incredible engineering. The negativity seems to be a result of previous bias.
It is incredible engineering and it has incredible downsides, not the least of which is the ability to destroy a market in seconds, due to a blip in information, with cascading domino effects.
Also the incredible focus on these two events, considering all the other turmoil in the financial markets, has always struck me as a clear case of scapegoating with Luddite underpinnings. Pretty soon, we will all believe that the recession was caused by HFT's.
If there was a similar video showing all of the electronic sensors of a modern airliner flowing into the central flight control computer would it would engender the same sort of trepidation about air travel? Should we be afraid of something just because it's "complicated" to someone unfamiliar with the state of the art? There are a lot of valid criticisms you can make about modern financial markets, but claiming that…
But they are not using those computer to do something better, they are using those computers to do something that was impossible 10 years ago.
The problem I have with HST is what purpose does it serve, other than offer another way to gamble on stock price movements.
Now there is nothing new about gambling on stock price movements but with HST it takes the control out of the market and puts it into the hands of a bunch of computer programs.
And to say that can't cause problems, you have to look no further than the hoax bomb at the white house tweet that wiped out $130 billion in market value in the matter of seconds.
Without those HST computers system all trying to out do each other, that event would not have been so dramatic.
Earlier quoted context omitted.
It is incredible engineering and it has incredible downsides, not the least of which is the ability to destroy a market in seconds, due to a blip in information, with cascading domino effects.
Which market has been destroyed in seconds?
Also, exchanges will revert back trades that happen over these flash crashes.
Earlier quoted context omitted.
If you want to buy/sell at a price, and there's no one ready to sell/buy at that price, a speculator (of any stripe) coming in and making that deal with you means you got the price you asked for. Maybe you could have got better - that's what the speculator is hoping - but you're no longer taking that risk. Statistically, the money going to the trader is similar to an insurance premium then. That's all "in principle"…
Aren't these speculators constantly entering and withdrawing these orders from the market on the order of microseconds? It's not like the order book for Johnson and Johnson is completely empty and there is absolutely nobody out there willing to sell shares. If I understand it right, the HFT machines are poking numbers around the current price trying to step ahead of a regular order before it comes in.