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

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

#411

Post by JumpCrisscross »

UltraSane wrote: post #409
KPGv2 wrote: post #401

Earlier quoted context omitted.

> 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.

> Anyone who isn't involved in HFT should be in favor of rules that slow down trades to human time scales

What are you basing this on?

I’m a former algorithmic market maker. Every plan to “slow down trades to human time scales” I’ve seen were trivially gameable. They were always proposed by a group of concerned citizens, and then jumped on by my bosses, because if the market is slowed down to pre-HFT speeds, Wall Street can make pre-HFT profits on risk-free trading again.

Do you think the internet would work better if we forcibly increased latency? If we did, if the argument were this would flatten the market and better let small websites compete with CDNs, do you think that would actually happen? Google and Cloudflare would say “oh well,” and disassemble their servers?

Our markets have structural problems. They are mostly solvable. HFT is none of them, which is why you keep hearing about it from folks who don’t want reform.

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

#412

Post by andsoitis »

robocat wrote: post #130
SkipperCat wrote: post #13

The Miami stock exchange (MIAX) has their matching engines colocated in Equinix's NY4 data center in Secaucus NJ, much like many other exchanges. I would not be surprised if TXSE does the same. Many trading firms already have their trading engines in that data center and I would assume TXSE would want quick access to that order flow and this might be easier if they are in NY4. Of course, they may want to have their c…

> I would assume TXSE would want quick access to that order flow Perhaps Texas could use a different trading model that doesn't require ultra high speed trading. Matt Levine often mulls the idea of a system with a trading window that doesn't let the fastest connection to the order book win. Perhaps an order book that works at human speeds so humans can trade too (I can think of a few ways to do it - but would need mo…

> Perhaps Texas could use a different trading model that doesn't require ultra high speed trading.

Benefits of high-frequency trading:

- Increased liquidity: improves market liquidity by ensuring there are always buyers and sellers

- Tighter bid-ask spreads: High-volume trading can narrow the spread between buying and selling prices, which can lower costs for investor

- Efficient price discovery: By reacting instantly to news and other data, HFT can help incorporate new information into a stock's price more quickly.

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

#413

Post by abm53 »

ForHackernews wrote: post #349
resters wrote: post #325

Earlier quoted context omitted.

The behavior of other participants is itself a first-class signal. Rule 611 compresses that signal. By forcing everything to orbit a size-agnostic NBBO, it collapses a lot of the “behavioral bandwidth” (depth, imbalance, sweep patterns, replenishment, cancel/replace cadence) into a single top-of-book tick. Less resolution, less information. High-resolution flow tells you who wants what, at what size, and how urgently…

It's pretty funny that there are people in this thread pretending like "price discovery" is a real thing that happens in markets based on information. We've all seen Dogecoin and BBBYQ. The emperor has no clothes.

We could make the distinction between price discovery, i.e. what price are people currently willing to buy and sell at (short-term) vs value discovery (long-term).

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

#414

Post by gnopgnip »

larsiusprime wrote: post #242
tomrod wrote: post #223

Earlier quoted context omitted.

All true. Texas worker environment is not great though. Folks typically list income tax as an advantage but property and sales taxes more than make up the difference. Also, govt admin is fairly hostile to any infrastructure expansion, preferring to let the local car dealers buy new town charters with no infrastructure. Environmental regs are not well managed generally. Anyhow, not the worst state, not the best. Prett…

Higher property taxes and low income taxes is preferable actually, it keeps the housing market from getting massively distorted.

Except the property taxes aren't based on the actual price paid. The tax assessment and appeal system is more prone to corruption than most states.

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

#415

Post by graycat »

jen20 wrote: post #228
usefulcat wrote: post #219

Earlier quoted context omitted.

> Perhaps Texas could use a different trading model that doesn't require ultra high speed trading. What would that look like? Periodic auctions? Certainly it could be done, I'm just trying to understand what problem might be solved, and whether the solution would be effective. For example, even with the opening and closing auctions we have today, there can be an advantage to getting your order accepted right before t…

One option is to add a random delay to every trade, thus making high speed arbitrage substantially more difficult.

> random delay

A Poison process. Just specify the expected value. E.g., if the expected value is 5 seconds and have gone some hours without an event, then the expected time is still 5 seconds.

E.g., like the time to some radio active delay and whatever its expected value to decay is.

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

#416

Post by immibis »

jen20 wrote: post #228
usefulcat wrote: post #219

Earlier quoted context omitted.

> Perhaps Texas could use a different trading model that doesn't require ultra high speed trading. What would that look like? Periodic auctions? Certainly it could be done, I'm just trying to understand what problem might be solved, and whether the solution would be effective. For example, even with the opening and closing auctions we have today, there can be an advantage to getting your order accepted right before t…

One option is to add a random delay to every trade, thus making high speed arbitrage substantially more difficult.

Or even a fixed delay. Imagine trading with one month delay - You'd have to bid what you think the stock is actually worth, not what you think everyone else will think it's worth in five milliseconds. That's extreme, of course.

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

#417

Post by growse »

CyberDildonics wrote: post #387
resters wrote: post #336

Earlier quoted context omitted.

All participants contribute to price discovery. A nanosecond order book helps with price discovery the deeper it is, regardless of whether orders clear. > The better the computers hooked directly into the exchange get you mean. I think you're trolling with this one. But you had an advantage typing your comment into a web browser compared to all the people who wrote theirs on paper and put it in an envelope with a sta…

A nanosecond order book helps with price discovery the deeper it is, regardless of whether orders clear. This is a claim, it is not being backed up by evidence. I think you're trolling with this one. But you had an advantage typing your comment into a web browser compared to all the people who wrote theirs on paper and put it in an envelope with a stamp. This analogy doesn't make any sense. Why would a person care ab…

> Why do people doing normal trading want to avoid the exchanges that have HFT computers skimming money off their trades?

What's "normal trading"? A prop desk at an investment bank? A hedge fund? A pension fund? Someone who's just installed Robin Hood on their phone?

Most rational participants want lower trading costs and overheads, smaller spreads etc. HFT provides that - the evidence being "look at what the spreads are today, compared with what they were pre computerised trading".

And you don't have to take my word for it, Vanguard thinks this too. https://www.cnbc.com/2014/04/25/vanguard-chief-defends-high-...

> The price is going to get discovered either way just as it has for hundreds of years, it happening a billion times per second does normal traders no good.

Could you explain how a market participant who makes one trade a day is negatively impacted by high resolution price discovery?

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

#418

Post by growse »

UltraSane wrote: post #361
drob518 wrote: post #295

Earlier quoted context omitted.

So, you want everyone to trade only daily or weekly or quarterly?

The same time frames that existed when humans manually traded.

Participating in the market certainly used to be more expensive. I'm not sure regressing to this is... A good thing?

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

#419

Post by [deleted] »

andsoitis wrote: post #412
robocat wrote: post #130

Earlier quoted context omitted.

> I would assume TXSE would want quick access to that order flow Perhaps Texas could use a different trading model that doesn't require ultra high speed trading. Matt Levine often mulls the idea of a system with a trading window that doesn't let the fastest connection to the order book win. Perhaps an order book that works at human speeds so humans can trade too (I can think of a few ways to do it - but would need mo…

> Perhaps Texas could use a different trading model that doesn't require ultra high speed trading. Benefits of high-frequency trading: - Increased liquidity: improves market liquidity by ensuring there are always buyers and sellers - Tighter bid-ask spreads: High-volume trading can narrow the spread between buying and selling prices, which can lower costs for investor - Efficient price discovery: By reacting instantl…

[deleted]

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

#420

Post by Ifkaluva »

kstrauser wrote: post #43
philipallstar wrote: post #8

Earlier quoted context omitted.

I imagine as businesses move away from NY and SF, they want their stock exchange to move with them, and for similar reasons.

And yet, it’ll be inevitably be seen as the Dollar Store stock exchange. “Well, we IPOed!” “Congratulations!” “…in Texas.” “Do you need to use me as a reference?”

I bet there will be tons of pressure for OpenAI to IPO on this Texas exchange.
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