Seems sad so much technical effort to be exerted towards something so venal, trivial, and fleeting.
If there is money in it, it will get solved!
Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol
101–110 of 143 posts
Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol
#102Earlier quoted context omitted.
Most HFT shops are relatively small. HFT is all about latency and turn over. Big quant shops might have HFT elements but lean far more towards systematic/algo strategies that can be relatively high latency (still super low latency, but not HFT) because these are the only strategies that you can deploy serious var with. The guys crushing HFT are not huge hedge funds, and they are solving more engineering problems than…
Of course the retail guy gets hurt. Who do you think buys the mutual funds that pay a higher price. Seriously, I hear this all the time, but it’s only one step removed. Why does everybody keep repeating this lie?
> Of course the retail guy gets hurt.
Nope. Retail traders get better prices; it's the big hedge funds that lose.
> Who do you think buys the mutual funds that pay a higher price.
The big index funds are paying a lower price.
> Why does everybody keep repeating this lie?
Because it's true.
Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol
#103Earlier quoted context omitted.
HFT has reduced costs under 99.99% of market environments. My direct cost and slippage is still so much lower than it would have been 30 years ago. Hell, even 10 years ago.
Where would the profits that go to HFT outfits go if HFT wasn't a thing? Genuine question, I have no idea how that works.
They would simply vaporize. At the margin, people trade because the frictional costs (spreads, fees, pricing/tracking error, risk) of trading are low. Fewer people would trade.
HFTs basically play an intermediary role: risking capital to buffer supply/demand imbalances, aiming to buy things at a discount or sell at a premium to their perceived value. The more transactions an intermediary does, the smaller his margins per transaction can be. Low margins fuel even more transactions in a virtuous cycle, and competition drives margins down.
Take this thought experiment to an extreme level. What would happen if short term speculation were banned, all stocks traded January 1, and had to be held for a year? Only very wealthy people with high risk tolerance could participate in the market, since they couldn't sell companies at will to fund personal expenses or if the business underperformed.
Volumes would plummet. Exchange/brokerage fees would be a significant percentage of the deal size, similar to what real estate agents charge, since they can only do a few transactions. Intermediaries would be something akin to a private equity fund, bidding 10-20%+ under value to cover the risk of holding for a year.
Even with trading reduced to once a minute/hour/day, many trades HFTs take the other side of now--say a medium frequency quant fund believes a company is underpriced by 0.1%--simply would not exist anymore, because spreads and fees would increase. Most ETFs would disappear. The marginal cost for an HFT to make markets in some small ETF is basically 0, but a human would make more at McDonalds than market making an ETF that trades a few hundred thousand shares a day.
Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol
#104I wonder if the next wave of hft will be a geostationary space station over New York, to get the extra occasional nanosecond.
Uh, I know it's a joke, but isn't geostationary orbit almost 36K km over the equator? The round trip time to NYC would be over a quarter of a second...
Hence, drones. With lasers... Laser drones...
Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol
#105Earlier quoted context omitted.
Where would the profits that go to HFT outfits go if HFT wasn't a thing? Genuine question, I have no idea how that works.
They would simply vaporize. At the margin, people trade because the frictional costs (spreads, fees, pricing/tracking error, risk) of trading are low. Fewer people would trade. HFTs basically play an intermediary role: risking capital to buffer supply/demand imbalances, aiming to buy things at a discount or sell at a premium to their perceived value. The more transactions an intermediary does, the smaller his margins…
As noted elsewhere in this thread, I suspect new markets would spring up. If the underlying could only trade once a year, the options market would be huge.
Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol
#106"So-called high frequency trading firms place trades in a fraction of a second, sometimes in a bet that they can move faster than bigger competitors." First off: no. Big money plays in high frequency trading (roughly half of all trading activity), and the smaller traders without instantaneous access are the losers in this game. Secondly, NASDAQ's obsession with precise global sequencing is A) misguided and B) effecti…
Bear in mind that exchanges are owned by the companies that trade on them - they've got a VERY strong vested interest in not fixing the problem. HFT works because fast traders can see a buy and sell order that are a distance apart, buy from the seller, then immediately offer to sell it at a fractionally higher price. Because they can see the buy order at all times, they know they can sell what they've just bought and…
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Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol
#107What value does this add to the world?
Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol
#108An interesting side-effect of this, is that it would enable a standard of synchronization, across geographic regions, such that one could treat a set of virtual machines as one ultra-wide-bus CPU with a 1 GHz clock speed. All of the local overhead of real system resouces and network synchronization could handled by the remainder of the real CPU clock available to the bare metal, but contribute to the computation of a…
How would the math work on that? Simple addition now requires coordination of results across many CPUs. Worst case is N-1 ticks where N is the CPU count. What operation would get faster by such a virtual CPU?
Economy of scale, my dude.
An organization seeking to market a product based on any spare slack or wastage of their bare metal could stitch together a niche product like this from enough resources, and price it in the space where it nets them money, and is cheaper than something an individual or small business might be capable of building on their own, with the cheapest possible parts.
That's basically the the core principle of every cloud product being sold.
Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol
#109An interesting side-effect of this, is that it would enable a standard of synchronization, across geographic regions, such that one could treat a set of virtual machines as one ultra-wide-bus CPU with a 1 GHz clock speed. All of the local overhead of real system resouces and network synchronization could handled by the remainder of the real CPU clock available to the bare metal, but contribute to the computation of a…
I don’t think you understand how memory bus width is calcuslated or what it means. You are an order of magnitude off on the layer in question.
An order of magnitude. Jeepers, that sounds really bad.
Re: Google and Nasdaq Pursuing Nano-Second Precision in Network Time Protocol
#110Earlier quoted context omitted.
The other thing I don't understand is that this paper argues against hardware timestamping on the grounds that users won't want to buy expensive hardware, and that Huygens is for "standard hardware ... in current data centers". Expensive, niche hardware is normal for the HFT folks that care about nanosecond precision.
The paper did not have hft as its primary use case, but you cannot contain reporters tendency to cherry pick eye catching aspects.
Yes, it seems that the designers tried to make something that would work in the current Google data centers. Which is not surprising as some of the authors work at Google.
I'd more want to know: why does Google need even better synchronization of time stamps than what they have now?