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Barbarians at the Gateways: High-frequency Trading and Exchange Technology

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Re: Barbarians at the Gateways: High-frequency Trading and Exchange Technology

#81

Post by rfnslyr »

chollida1 wrote: post #72
rfnslyr wrote: post #54

Earlier quoted context omitted.

How do I get into this field? I'm a 20 year old making a shit ton of money by doing mobile work but I find it so boring. Nothing about it is innovative. I feel like a high level computer construction worker. It's brainless for the most part, it just takes time . I want to get into some really cool stuff. I've been wanting to get into investment banking from a technical standpoint, HFT, algorithmic trading etc, but ho…

> How do I get into this field? Well turn the question on its head and ask what can you bring to a hedge fund to allow it to be more successful. That's the test we use. Hedge funds are similar to start ups in that they are small businesses where everyone needs to pull their own weight and be able to handle their own area without supervision as everyone is busy enough handling their own area of concern. Or put another…

Thanks for the answer. I meant more of an absolute beginner in finance, in general, nevermind the stock market or trading or writing bots or hedge funds. Thanks for the insight.

Re: Barbarians at the Gateways: High-frequency Trading and Exchange Technology

#83

Post by SkyMarshal »

dopamean wrote: post #32
cs702 wrote: post #27

So much talent... focused on the buying and selling of securities , instead of creating new things that will make the world better in a directly measurable manner. Virtually all trading volume today consists of buying and selling old securities -- essentially, legal claims on existing assets. The sale of new securities issued to finance the creation of new products and services -- for example, a company selling new s…

Someone said something similar about a lot of people in the startup community. That we were sending our best and brightest out to create products that ultimately only served the purpose of pushing ads (Instagram, Facebook, Twitter, etc). I don't know how true this is. There are a lot of very smart people in the world. The luxury of having that many smart people is that we can have a lot dedicated to designing amazing…

Jeff Hammerbacher, CTO of Facebook, now CEO of Cloudera.

That said, actual product companies are making a comeback in Silicon Valley, and are using innovative new tech like 3D Printing, and there's some amazing work going on in Virtual/Augmented Reality as well (Occulus Rift, CastAR, Google Glass), - all physical products.

And lets not forget Tesla upending the world's perception of the economics of producing and owning electric vehicles.

While I agree with the sentiment about smart people wasting their potential chasing cash, I think it's only an intermediary phase before the next wave of "insanely great", life-changing products hits critical mass.

Re: Barbarians at the Gateways: High-frequency Trading and Exchange Technology

#84

Post by npongratz »

foobarian wrote: post #30
cs702 wrote: post #27

So much talent... focused on the buying and selling of securities , instead of creating new things that will make the world better in a directly measurable manner. Virtually all trading volume today consists of buying and selling old securities -- essentially, legal claims on existing assets. The sale of new securities issued to finance the creation of new products and services -- for example, a company selling new s…

I always wondered whether it would make sense to legislate a random added latency in exchanges in order to create a latency noise floor to remove the need for HFT. Without such a cap it's an arms race that adds no value.

Why resort to legislation? Create such a market yourself (or with a team) and see if your tweaks naturally drive demand from market participants. No force necessary.

Re: Barbarians at the Gateways: High-frequency Trading and Exchange Technology

#85

Post by 001sky »

gd1 wrote: post #66
001sky wrote: post #18

By 2005 we were approaching the one-millisecond barrier for latency arbitrage Everything you need to know, in one soundbite.

Why? What's the response time on an airbag release in an accident? On the ABS in your car? Your graphics card manages to rotate, scale, texture and shade a hundred million polygons per frame in around 1000/60 = 16ms. We're talking here about processing one UDP frame, usually under 256 bytes. Why is this the only topic discussed by HN where technology suddenly becomes this frightening bogeyman?

Its not the engineering, its the objective. Latency arbitrage is code-word for front running. Woops.

Re: Barbarians at the Gateways: High-frequency Trading and Exchange Technology

#86

Post by SkyMarshal »

31reasons wrote: post #52
dopamean wrote: post #32

Earlier quoted context omitted.

Someone said something similar about a lot of people in the startup community. That we were sending our best and brightest out to create products that ultimately only served the purpose of pushing ads (Instagram, Facebook, Twitter, etc). I don't know how true this is. There are a lot of very smart people in the world. The luxury of having that many smart people is that we can have a lot dedicated to designing amazing…

Then why we haven't cured cancer yet or malaria or global warming or psychological disorders ? There are a lot of smart people in the world but we really can't afford to work on silly things.

Some of those problems are "Nine women can't make a baby in one month" type problems. Sometimes the solutions are stumbled upon by accident, rather than by concerted effort, especially in medicine.

In fact it wouldn't surprise me if some sophisticated neural net algorithm developed for HFT was repurposed and used successfully for other things - medical research, climate modelling, brain research - basically anything involving non-linear dynamic systems.

Only problem of course is that all those HFT algorithms aren't FOSS, but the incentive to develop them in the first place would be greatly diminished since they'd lose whatever edge they had almost immediately after publishing.

The markets are a pretty decent lab for experimentation and learning about complex systems, which we're still not so great with, as long as systemic risk can be prevented and every player forced to take their losses instead of passing them off to governments. I personally don't think HFT is remotely as much a problem as what caused the financial crisis - a few flash crashes here and there plus an "HFT tax" on asset prices, vs the arguably-fraudulent origination and dissemination of trillions of dollars of bad debt resulting in the near total annihilation of the global economy. I think we'll gain a lot more (or at least lose a lot less) as a society by prioritizing the latter problem.

Re: Barbarians at the Gateways: High-frequency Trading and Exchange Technology

#87

Post by kazagistar »

dopamean wrote: post #32
cs702 wrote: post #27

So much talent... focused on the buying and selling of securities , instead of creating new things that will make the world better in a directly measurable manner. Virtually all trading volume today consists of buying and selling old securities -- essentially, legal claims on existing assets. The sale of new securities issued to finance the creation of new products and services -- for example, a company selling new s…

Someone said something similar about a lot of people in the startup community. That we were sending our best and brightest out to create products that ultimately only served the purpose of pushing ads (Instagram, Facebook, Twitter, etc). I don't know how true this is. There are a lot of very smart people in the world. The luxury of having that many smart people is that we can have a lot dedicated to designing amazing…

Theoretically, people would pay for the things they value and problems they want solved, and the market would do the rest.

Practically, most people don't actually have that many major problems that need solving, and it is pretty simple to invent something that isn't what someone needs, and convince them that they need it, then to come up with novel ideas.

Industry and free enterprise does not solve problems much anymore. It sells the process of convincing people they have problems.

Re: Barbarians at the Gateways: High-frequency Trading and Exchange Technology

#88

Post by gd1 »

001sky wrote: post #85
gd1 wrote: post #66

Earlier quoted context omitted.

Why? What's the response time on an airbag release in an accident? On the ABS in your car? Your graphics card manages to rotate, scale, texture and shade a hundred million polygons per frame in around 1000/60 = 16ms. We're talking here about processing one UDP frame, usually under 256 bytes. Why is this the only topic discussed by HN where technology suddenly becomes this frightening bogeyman?

Its not the engineering, its the objective. Latency arbitrage is code-word for front running. Woops.

You'd best look up the definition of "front-running". Reacting to an event the fastest makes you the quickest behind-runner, but you're still behind. Not front-running at all. Where did you even learn this term? Are you just regurgitating something you've heard elsewhere?

Re: Barbarians at the Gateways: High-frequency Trading and Exchange Technology

#89

Post by 001sky »

gd1 wrote: post #88
001sky wrote: post #85

Earlier quoted context omitted.

Its not the engineering, its the objective. Latency arbitrage is code-word for front running. Woops.

You'd best look up the definition of "front-running". Reacting to an event the fastest makes you the quickest behind-runner, but you're still behind. Not front-running at all. Where did you even learn this term? Are you just regurgitating something you've heard elsewhere?

Try looking up the definition of 'arbitrage'

Re: Barbarians at the Gateways: High-frequency Trading and Exchange Technology

#90

Post by theorique »

pasbesoin wrote: post #61

I'm going to say this again: Exchanges should be put on a stepped clock. I'd suggest a one minute interval. Orders pile up during that interval, and then they're processed in random order. If things start to go really, State-concerning hinky, then authorities "pull the plug" before the next interval is up. Anything less, to my mind, serves point-shaving and profiteers, rather than real investment. Then, all the "gear…

Because of course "real investment" is saintly like the Dalai Lama, and is certainly not looking for a profit.
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