141–150 of 243 posts
Earlier quoted context omitted.
HFT does not add liquidity, but they do squeeze spreads in liquid contracts. It's some what good for retail, but terrible for institutional investors, which hurt retail on the backend. HFT is just a front running operation in those cases.
What is that definition of adding liquidity that doesn't include "tightening the spread"?
"The best part is the fine: $12m, despite the resulting audit also revealing that the system was systematically sending naked shorts." Cool - all you have to do to get away with financial crimes is create a system with no protections against breaking the law.
Be very careful with what you are suggesting. If we are going to call them criminals because of bug in their code and system. Then don't be upset the day you are called a criminal for a bug in your code, for not having a test unit or deploying the wrong thing and not having the right process in place.
[1] http://en.wikipedia.org/wiki/Hyatt_Regency_walkway_collapse#... - no criminal penalties, but civil penalties and lost their license to practice.
[2] http://en.wikipedia.org/wiki/Regulation_and_licensure_in_eng...
High Frequency Trading seems so abstract. There's no value created, it seems. It's like something in between imperfect systems, scraping off the margin created by that imperfection. It's fascinating, and interesting from an algorithmic point of view (like a computer game), but at the same time I don't feel sympathy for this company going out of business.
I would support idea to just price every transaction with a 0.0001% transaction fee. It should be enough to bring the whole HFT industry out of business while not having any impact on markets themselves.
High Frequency Trading seems so abstract. There's no value created, it seems. It's like something in between imperfect systems, scraping off the margin created by that imperfection. It's fascinating, and interesting from an algorithmic point of view (like a computer game), but at the same time I don't feel sympathy for this company going out of business.
I would support idea to just price every transaction with a 0.0001% transaction fee. It should be enough to bring the whole HFT industry out of business while not having any impact on markets themselves.
High Frequency Trading seems so abstract. There's no value created, it seems. It's like something in between imperfect systems, scraping off the margin created by that imperfection. It's fascinating, and interesting from an algorithmic point of view (like a computer game), but at the same time I don't feel sympathy for this company going out of business.
Looking at systems by considering whether they 'create value' in some generalized utilitarian sense is unproductive. Such systems survive by being able to extract energy somehow, in this case by exploiting properties of the stock trading system. I guess you could say that they create a lot of value—for the people doing it. Very few modern economic activities make sense in a broader perspective, they exist purely beca…
Earlier quoted context omitted.
Looking at systems by considering whether they 'create value' in some generalized utilitarian sense is unproductive. Such systems survive by being able to extract energy somehow A perfect description of many forms of organized crime.
Also a perfect description of life forms.
High Frequency Trading seems so abstract. There's no value created, it seems. It's like something in between imperfect systems, scraping off the margin created by that imperfection. It's fascinating, and interesting from an algorithmic point of view (like a computer game), but at the same time I don't feel sympathy for this company going out of business.
I really hate to go down this road because it's been rehashed thousands of times on Hacker News, but high frequency traders add value to the market by adding liquidity (and therefore reducing spreads --> cost to you for executing) and price discovery.
Norway's sovereign wealth fund (one of the largest in the world, they own 1% of all US stocks) just came out on this exact topic:
http://www.efinancialnews.com/story/2013-09-17/norways-sover...
> Next, the paper takes on HFT's usual defence – that they provide the market with much-increased liquidity. Norges Bank worries that this liquidity is "transient" - i.e. HFTs often place large orders only to then cancel them, creating "phantom" liquidity and leaving "buyside traders fac[ing] new challenges in assessing posted liquidity."
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What I'm trying to say is that systems don't exist because they are 'good', they exist because they survive. When trying to interpret the world, 'value' is a much less powerful explainer than survival.
Who says he tried to interpret the world? He was giving his own value judgement about it. Also, I do think that knowing whether something actually creates value or not (is a positive-sum, negative-sum or zero-sum game) is definitely helpful in understanding large systems. i.e: It helps predicting whether a society will succeed or fail, by seeing how much of it is wasted on negative/zero sum games.
Earlier quoted context omitted.
Be very careful with what you are suggesting. If we are going to call them criminals because of bug in their code and system. Then don't be upset the day you are called a criminal for a bug in your code, for not having a test unit or deploying the wrong thing and not having the right process in place.
Having worked in the aerospace side of software dev, I'd actually be cool with this. Outside of software, real engineers have real liability when their systems fail [1]. PEs [2] are held accountable in most countries that license engineers when they sign off on things that should not have been signed off on. Too many people on the software side, even in safety critical systems, play fast and loose with the "engineeri…
If every software project was run like an avionics project, software would be more reliable and of higher quality. But the world would be worse off; most of the software people use would never come into existence.
Earlier quoted context omitted.
Having worked in the aerospace side of software dev, I'd actually be cool with this. Outside of software, real engineers have real liability when their systems fail [1]. PEs [2] are held accountable in most countries that license engineers when they sign off on things that should not have been signed off on. Too many people on the software side, even in safety critical systems, play fast and loose with the "engineeri…
You are missing an important point: different systems fail in very different ways. The reason why people will generally prefer software over other ways of building things is because the cost of failure is often very low. No one is going to die if a website serves an incorrect image, nor will such a bug require billions of dollars worth of semiconductor inventory to be recalled to repair. If every software project was…