LSE Breaks World Record In Trade Speed With Linux

LingNoi writes with this excerpt from ComputerWorld UK: "The London Stock Exchange has said its new Linux-based system is delivering world record networking speed, with 126 microsecond trading times. The news comes ahead a major Linux-based switchover in twelve days, during which the open source system will replace Microsoft .Net technology on the group's main stock exchange. The LSE had long been criticised on speed and reliability, grappling with trading speeds of several hundred microseconds. The 126 microsecond speed is 'twice as fast' as its main international competitors, the London Stock Exchange said. BATS Europe and Chi-X, two dedicated electronic rivals to the LSE, are reported to have an average latency of 250 and 175 microseconds respectively. Neither company immediately provided details. But many of the LSE's older and more traditional rivals offer speeds of around 300 to 400 microseconds. Nevertheless, Linux is now standard in many exchanges, including the New York Stock Exchange."

Comments

Best for headshots

[Anonymous Coward]

Windows games: Plentiful and well developed. Mac games: Barely existent. Linux games: Lowest latency.

Re:Best for headshots

[baegucb]

WoW client works fine under wine (tad better than under Windows imho).

Re:Best for headshots

[the Haldanian]

WoW client works fine under wine (tad better than under Windows imho).

Really? And what is the major improvement/difference, besides running under wine/in linux?

Swap performance and VM handling, frankly. It's better at not putting things in swap it shouldn't, and quickly getting things off swap it needs. Generally less lumpy if you aren't swimming in memory like I'm not.

I also get the added benefit of instantly switching in and out of the game with virtual desktops, and being able to shut down all unnecessary systems and programs, and SIGSTOP/hibernate large things like firefox so they sink entirely out of memory until I call them back, and I have total scripting and file control over all my addons and logs and things.

Also, crashes won't take out the box, and if things get really gnarly, I log in behind my GUI remotely and shoot things. For some games that are going under due to game corruption, flicking to the CLI, Kill, restart, can get the game back before the server has given up on your connection. WAY faster than Windows.

Re:Best for headshots

[Stachybotris]

He's referencing Monster cable, such as this product, and making fun of the fact that 'audiophiles' will spend enormous amounts of money on gear that they have no solid way of proving is better.

Re:Best for headshots

[mcgrew]

Like everything else in life, you get what you pay for.

When anyone says that to me I hang on to my wallet for dear life. If you buy those expensive digital cables for stereo, you are NOT getting what you paid for -- you've been scammed. When you pay $100 for a pair of blue jeans, you're also being scammed. When you pay three times for a bottle of Alieve what you would pay for a bottle of generic naproxin sodium, you're getting scammed. In none of these instanced are you getting what you pay for.

You do, however, usually (but not always) pay for what you get. When you buy an overclocking fan, you are paying for what you get provided it really is a superior fan. When you buy Alieve you're paying for what you get, plus some. All you're getting is naproxin sodium, no different than the generic that costs 1/3 as much.

Re:Best for headshots

[Anonymous Coward]

As Microsoft strives to migrate their core technologies from the desktop onto the Web, so too is their propaganda machine migrating from the established press to the informal social web.

Microsoft shills are invading social web sites everywhere - in forums, discussion groups, comments to news items, edits to Wikipedia, manipulation of search engines, comments to blogs - posing as innocent participants to promote their agenda and counter wide spread complaints about their shady marketing practises. Even in the comments section of blogs by Microsoft employees on their own corporate site they employ sock puppets to say the things the author felt inappropriate to say directly. They race to place their shill postings at the top spot in the comments section of news and blogs, or perhaps they are given advance notice enabling them to do this where they are a sponsor.

The evidence is here on Slashdot for all to see, without embellishments from me. What I say here is amounts to only a digest of hundreds of postings by others. A careful investigator can see for himself the evolution of discussions on Microsoft related issues, especially those showing competitors in good light. As one reads from Slashdot's historical record on through to recent times, the evolution of Microsoft's efforts to pervert Slashdot's discussions becomes readily apparent. Microsoft's ambition is to twist internet discussions around a full 180 degrees until these discussions become a platform for propaganda from Microsoft's "Ministry of Truth". A study of the comments of the shills posted here can be cross-correlated with postings on other sites. Their pattern of saturating a discussion with shill postings, and the repeating of mindless memes becomes obvious. Their harassment, ridicule, and suppression of criticisms is designed to intimidated those who would speak out against them. They seek to establish and enforce a discipline of giving Microsoft "fair treatment" and their propaganda the same consideration and respect a real person would deserve.

In the process they are destroying the social web as we know it. This insidious attack on the infrastructure we rely upon to form our opinions in a complex world has both a direct and an inhibitory effect on free speech as a side effect.

We must stop this while it is in its infancy. Once it fully established, it will become much more difficult to root out, and other ruthless corporations, organizations, and even governments will want to emulate the success of Microsoft's campaign.

This is the nightmare vision of the end of the social internet as we know it.

Re:Best for headshots

[TheKidWho]

For starters, those fans don't make economic sense, but that was never the point. The point is to get the best performance possible.

The fact is that the replacement of a fan/heatsink with a item that isn't supplied by the systems manufacturer makes no sense and doesn't, actually, get you any worthwhile gain for the money you spend.

This is just a sign of your ignorance, an aftermarket heatsink will reduce the CPU temperature by tens of degrees. It's the difference between getting a 3.5ghz overclock on air versus a 4.2ghz overclock on air. It's a pretty big difference performance wise, on the order of 20%. As an anecdote from my own testing, my Core i7 920 hits around 90C at 3.6ghz with the stock fan/heatsink while on my Scythe Mugen 2($50 heatsink/fan) it hits 68C at 3.8ghz. For some people that extra 20% of performance is important, for most people it isn't.

(I hate overclockers - I challenge any overclockers to ring up a significant number of CPU cycles gained by overclocking when you take into account their overall average computer usage. Yeah, you might get a handful of FPS better but the games aren't designed for that anyway so all you gain is stretched textures on a unnecessarily high resolution moving slightly faster than your perception would ever allow you to detect anyway).

Cool man. Did you ever think that some people do it because they enjoy the tweaking? Some games also require you to run overclocked if you run the game at high resolution(2560x1600) to max out the game. On the i7s with multiple GPUs the issue is very apparent. A lot of overclockers also contribute their spare CPU power to groups such as Folding@Home doing Protein research.

Expensive fans, heatsinks, etc. do not make economic sense for 99.999% of users.

Sure, so what? See above.

Overclocking is the go-faster stripes of the PC world.

Not true at all, the main reason people overclock nowadays is to turn their $200 CPU into the equivalent of a $1000 CPU. I purchased my i7 920 for only $200 last year and I have it performing faster than the i7 960 which cost $999 at the time by overclocking it. A lot of people do it for price/performance reasons more than anything else. The money saved from purchasing an "inferior" CPU goes into the purchase of better cooling equipment to manage the heat.

If I want a cooler PC, or faster graphics, or whatever, it tends to be that after a certain point (usually the mid-to-top-end equipment), the returns are so minuscule as to pale in comparison to *ANYTHING* else I might do. I've seen processor overclocking gains that are wiped out (by orders or magnitude) by installing a better antivirus (yes, they were running an AV on their overclocked, behind-the-firewall, games-only machine that was sucking up about 25% of their CPU time but thought that running their systems out of specification by a handful of percent was "worthwhile"), or taking a couple of items out of my startup, or putting the PC so it's not blowing its exhaust air at a solid wall.

This is true to a point. I recently built a comptuer for my friend to play Starcraft II maxed out, total cost was only $550, miniscule compared to the $2k I spent on my rig and it plays the game nearly as well. However that's not why I spent $2k on my computer. Regardless, why do you assume overclockers are idiots? You'd think most of us would be smart enough to recognize where slowdowns are occuring in our computers since most of us are seeking the best possible performance for the money. Just because your friend is an idiot doesn't mean we all are.

And when you factor in the extra cost, you really are better off NOT touching a bog-standard off-the-shelf system but instead saving all that money and time you would normally spend tweaking with a) playing the damn game and b) putting the money sav

Not just useless, but actually toxic.

[QuoteMstr]

Trades that happen this fast are only good for further enriching large investment firms that can afford to spend millions on clever algorithms for shuffling numbers around. This speedup lets these companies make even more money without creating one damned thing that's useful to any living person.

Limit trades to one per second per institution, and while you're at it, add that tiny per-trade tax. Finance should be boring. Let's encourage people to focus on the real economy that operates in the world inhabited by you and me.

Re:Not just useless, but actually toxic.

[buchner.johannes]

Can someone explain to me what the system does in these 126 microsecond? Is it sending packets through the world, doing some complicated calculations, solving locking resources? It seems an awefully long time to add to a table and update some stats.

Re:Not just useless, but actually toxic.

[Ethanol-fueled]

The idiots in charge of the stock markets believe that, since Linux doesn't crash, their stock markets won't either.

Re:Not just useless, but actually toxic.

[mpoulton]

Trading this fast brings the market closer to optimal economic efficiency, where prices at any instant accurately reflect value. Latency contributes to the very inefficiencies that you blame these "large investment firms" from profiting off of. These high-speed arbitrage and "quant" investors may make a profit without creating a product (though collectively their track record is not very good financially), but their profit margins are vanishingly small and they serve a critical role in equalizing prices between markets and keeping prices up to date as market conditions change. In short, your complaint about these trading practices smacks of jealousy and sour grapes, and it ignores the valuable role they serve in the markets.

Re:Not just useless, but actually toxic.

[Anonymous Coward]

It is the time measured from when a bid/ask order is sent from the customer's network port, until it has been processed/stored and possibly matched at the Exchange, and back again.

Re:Not just useless, but actually toxic.

[Anonymous Coward]

The idiots in charge of the stock markets believe that, since Linux doesn't crash, their stock markets won't either.

And if Linux crashes, Linus will give you a full refund.

Re:Not just useless, but actually toxic.

[dakameleon]

I respect your optimism and idealism when it comes to these things, but Index Arb desks are making some of the most effective, near-risk-free profits for the big banks, and it's little wonder the LSE wants to be at the forefront of this market. You don't have to pay a computer a bonus, and the programmers behind this hardly see the same kind of money as the big swinging dick traders who try to spot the macro inefficiencies. Furthermore, the same strategies and speed advantages are used for algo traders to allow big blocks of trades to go through as best possible without shifting the market, making more cash when the trades are billed to the client at a weighted average instead of the true cost.

But then you don't see these numbers in the breakdown of the Goldmans profit numbers, and you never will. In the casino of the share market, the dealer is helping the sharks fleece the sheep.

Re:Not just useless, but actually toxic.

[NoSig]

I can't tell if you are are someone defending your own work to assuage your conscience or a troll pretending to do so, but anyway: There is no value to equalizing prices in less than a second, especially when the "equalizing" you are talking about is really just pocketing the difference. The only value there would be in equalizing prices in less than a second would precisely be to remove the threat that these people pose. Since sub-second trades are necessarily automated trades, they also cannot be doing anything sensible to keep prices up to date as real world conditions change, as that requires understanding the real world which an automated system cannot. They serve only the function of increasing profits for their investors - how little or how much damage they cause in the course of that is what is debatable.

Re:Not just useless, but actually toxic.

[1s44c]

Much as I'm sure that Linux will perform faster and with far more stability than Windows in all given applications the parent is spot on here.

More speed isn't the answer here, less speed is needed. If anyone wants to buy and sell little bits of companies at those kinds of speeds they clearly have no interest whatsoever in the companies they are trading. They can only be gaming the system for unearned gain.

Investment bankers ( and I don't mean real investors ) are parasites on the capitalist system and anything that enriches them impoverishes someone who works for a living.

Re:Not just useless, but actually toxic.

[atomic brainslide]

while in theory your idea is correct, the harsh reality is that in practice, the large investment firms increase their profits drastically because there are actually two markets. this isn't strictly legal, but it's there. the large firms have dedicated connections to the exchanges with guaranteed SLAs and lower latencies than any other regular participant in the market. this allows them to stuff the buy/sell queues and rapidly cancel orders before they go through. the purpose of this is to deduce other bidders' price points and gain an edge. there are a number of such hedge funds (and even a major bank whose name escapes me), for example, that have had perfect trading days for over a year. statistically impossible outcomes like this only come from gaming the system in the above mentioned manner. as usual, the regulators are asleep at the wheel and the markets become more volatile week to week with increasing flash-crashes exactly because of these schemes. more efficient markets these are not.

Re:Not just useless, but actually toxic.

[nacturation]

Trading this fast brings the market closer to optimal economic efficiency, where prices at any instant accurately reflect value. Latency contributes to the very inefficiencies that you blame these "large investment firms" from profiting off of.

The faster the trades, the greater the disparity between how fast a normal Joe investor can trade vs. how fast an investment firm plugged directly into the exchange can trade. Let's say I'm down the block and my ping times are an awesome 6 milliseconds. A large investment firm plugged into the exchange might have a ping time of 1 millisecond (I'm being quite conservative here), even 1% increase in benefit I see the investment firm is going to see a 6% benefit.

Yes, they play a role in equalizing market prices (more power to them) but they can also profit from the fact that ordinary investors are acting on information that is outdated because they are unable to receive the information as fast as the large institutions can. The greater trading speed only increases this disparity.

Re:Not just useless, but actually toxic.

[MyFirstNameIsPaul]

The regulators are not 'asleep at the wheel'. They are playing their historic role of do what the boss tells you, and if the boss doesn't tell you to bust one of the huge firms, you don't. If the regulators are incapable of protecting the small investors, then get rid of the regulators, but don't blame the technology. Your assumption that the market is more volatile today than ever before is weak. Take a look at the Dow in the 30s.

Re:Not just useless, but actually toxic.

[Tom]

Trading this fast brings the market closer to optimal economic efficiency, where prices at any instant accurately reflect value.

It might, if the trading were actually being done at the exchange, for market prices. It isn't. Most trading today is only registered at the exchange, but the actual deal is brokered elsewhere.

Also, the amount of liquidity a market needs is subject to discussion. Do you really need to have a counterpart available this second for a market to work? That is nonsense, the market (the real market, not the speculative one) wouldn't burn and die if you had to wait a second or two or even *gasp* five for a deal to go through.

Providing liquidity is a valuable role. However, you are ignoring the fact that everyone is in it for the money. If the cost of liquidity, i.e. the amount of profit the high-speed traders extract from the market, becomes too high, the market also suffers. Somewhere, there is an optimal point between the positive (more liquidity) and the negative (the cost of this liquidity).

Re:Not just useless, but actually toxic.

[LingNoi]

It might crash but at least it won't have an 8 hour down time like their previous windows based system had. Oh, and you can forget about the imaginary support you'll get with that windows license as the London stock exchange found out the hard way.

Re:Not just useless, but actually toxic.

[hughbar]

There's a huge problem with the word 'value' in the above.

To declare interest, I'm ex-investment banking and not too proud of it. The 'values' and 'derivatives' exchanged are often not mapped to anything happening in the 'real' world [think manufacturing, [useful] services even], however they do have a negative impact on it [factory closures, bank bailouts paid by the taxpayer, for example].

Try a thought experiment, does anything useful change in 126 microseconds? Bread get baked? Pizza cooked? House built? Seed planted, if you want to get rural and idyllic?

Incidentally, I'm not against simple futures, for example, they smooth the farmer's year and have a purpose. I am pretty much against most exotic financial derivatives and against short-term [126 microseconds, for example!] 'investment' to use ironic quotes...

Re:Not just useless, but actually toxic.

[Pinky's Brain]

The HFT algorithms aren't value based, how could they cause the stocks to accurately reflect value? HFT is a pure arbitrage play, gaming the restricted strategies of long term investors (in some cases legally restricted). Forcing volatility beyond normal variance to try to benefit from stop loss orders is a perfectly valid HFT strategy ... does nothing to make stocks reflect value though.

HFT has one benefit, increased liquidity, and one downfall, increased volatility. For the moment humans are still the only ones capable of judging value ... the HFT algorithms add nothing there.

Re:Not just useless, but actually toxic.

[wvmarle]

This is not about investors. They are barely if at all affected by these fast trades. Investors are people that buy stocks to hold for long-term gains (either dividends or value increase).

This is about speculators. The people that try to ride the natural fluctuations to make a quick buck.

Re:Not just useless, but actually toxic.

[Anonymous Coward]

no button, it's all CLI, dweeb.

Re:Not just useless, but actually toxic.

[Pinky's Brain]

Themis Trading has a white papers on the kind of information HFT algorithms get to play with (for a fee of course, the exchanges want their cut).

http://blog.themistrading.com/?p=906

PS. some of this is being addressed at the moment, but it shows where the real money in HFT is coming from ... and it sure as hell isn't being better at price discovery.

Re:Not just useless, but actually toxic.

[hairyfish]

Which specific part of Linux inherently prevents 8 hour outages? Or is this one of those 'Linuxeses R teh awes0me, indows is teh suck' type post?

Re:Not just useless, but actually toxic.

[Splab]

Yeah was thinking the same.

My database which is running pretty damned fast (general purpose) spends around 30.000 microseconds on simple add/update/inserts (timed from middle-ware calling), having a computer respond to anything in 126 microseconds is down right impressive.

Re:Not just useless, but actually toxic.

[Nursie]

the part where it's running on a mainframe?

(Yeah, I have no idea whether the stock exchange has anything to do with mainframes, but I know you can put linux on 'em)

Re:Not just useless, but actually toxic.

[buchner.johannes]

Anonymous Coward writes:

It is the time measured from when a bid/ask order is sent from the customer's network port, until it has been processed/stored and possibly matched at the Exchange, and back again.

ikkonoishi writes:

Lots of data going in lots of data going out. Millions of people make trades on this thing constantly.

nacturation writes:

One eighth of a millisecond is an awfully long time?

davester666 writes:

It increases the time delta between when your broker trades the stock up a little, then puts through your trade by selling you the stock he just bought, but for a little more than what he bought it for. Every time.

lena_10326 writes:

You do realize this is a stock exchange processing large volumes of transactions requiring a high degree of availability and consistency? Not a ma-and-pop website processing 100 transactions a day. Right?

Johannes concludes: no one knows what it does. Yet we are stunned of the millions of transactions flowing around.

The limiting factor can't be throughput/number of transactions, given that the data flow is continuous.
The closest to an answer is that it is network latency. But why is it relevant to use Linux then? Because the TCP/IP stack is so great? Wouldn't the specs of the network (fibre?) be more interesting?

Re:Not just useless, but actually toxic.

[LingNoi]

No, i'm talking about the hours of downtime that the previous system experienced (my bad 7 hours not 8). It was a simple fact (get the facts haha).

When one of the numerous Linux exchanges goes down for that long then call me.

Re:Not just useless, but actually toxic.

[1s44c]

I wonder if you'd be saying the same thing if they were replacing Linux with a Microsoft solution. Probably not.

Of course I would. The problem here is not the OS.

Re:Not just useless, but actually toxic.

[Anonymous Coward]

It's not only updating tables...

The exchange gets a cut of every sale, so at the very least, the more sales you have the more you can profit.

It's more insiduous than that though. Between the price a buyer wants to pay and a seller wants to receive, there's a certain spread. Faster trades allow the exchange to take advantage of that spread. Sometimes it lasts a second or so, but trading volume means a second can make thousands of dollars.

Faster exchanges also allow 'tasting'. The average investor doesn't get to take advantage of it, but the large houses do. They can float a price out there and see how many people are willing to buy at that price. Then they can test a higher price... Then higher.. At some point they reach a price that maximizes their profit.

It also means that certain brokerage houses can get their trades in faster. So that means a popular and rising stock goes to those houses that pay for the privilege of first dibs. These houses can then set the price on the stock.

There are dozens of other ways that faster trades help.... Of course, none of it helps us, the average stockbroker.

Re:Not just useless, but actually toxic.

[martin-boundary]

Trading this fast brings the market closer to optimal economic efficiency, where prices at any instant accurately reflect value.

This is fundamentally wrong. The only way to bring the market mathematically closer to the ideal is to speed up time for everybody in the market. But that's certainly not what's going on.

Only some market participants get to trade at a faster rate in reality, so what this leads to is a bias in the prices which weighs the preferences of those privileged participants more than those of the other, unprivileged, participants.

Put another way, the asymptotic optimal values computed in a two tiered market where some players can act much more frequently than others are not the asymptotic optimal values computed in a single tiered market where all players can act at the same frequency. It's a fundamental misunderstanding of market dynamics to think otherwise.

Re:Not just useless, but actually toxic.

[kiddygrinder]

and if windows crashes, i hear steve gives you a sexy massage.

Re:Not just useless, but actually toxic.

[rtb61]

So the London stock exchange has updated it's operating system to accelerate it trades, just as it seems likely that laws will be implemented to decelerate trades. It makes logical sense that trades be slowed to a 24 hour cycle to stabilise the global share market a prevent algorithmic stock price collapse or major firms distorting the market electronically with rapid internal trades.

Re:Not just useless, but actually toxic.

[networkconsultant]

Utilizing FIX or some other Exachange based protocol, the server looks for your order, finds the cheapest holding house and then requestes that order, once posted it is then filled by whomever had the lowest bid out of about 200 institutions world wide. A typical trade involves about 20 to 80 database queries.

Re:Not just useless, but actually toxic.

[TheLink]

Actually what is most disgusting is:

When those algo/HFT systems have bugs or lose big
a) the stock market rolls back the trades[1]
b) the small timers beating those algorithms get sued.[2]

But they don't do that when the small timers make mistakes or the algo/HFT systems beat the small timers.

Even though many of the HFT bunch are doing dubious stuff:
http://www.nytimes.com/2009/07/24/business/24trading.html
http://www.nytimes.com/imagepages/2009/07/24/business/0724-webBIZ-trading.ready.html

[1] http://www.reuters.com/article/idUSTRE6456QB20100507
[2] http://www.computerworlduk.com/news/security/3244186/norwegian-traders-convicted-for-outsmarting-us-stock-broker-algorithm/

Re:Not just useless, but actually toxic.

[TheLink]

It's just front-running and other normally illegal stuff by a different name.

Effectively a tax on everyone else.

Re:Not just useless, but actually toxic.

[gundersd]

It may be true that nothing useful in the real-world changes in 126 microseconds... however...

The way I look at it is that 'the market' is like a big complicated electronic system which contains a lot of complex feedback loops (some of them more stable than others). Imagine tweaking a random knob on such an electronic circuit and watching the effects of that tweak ripple through the circuit until it (hopefully) reaches a steady state again.

Increasing the latency causes changes to ripple through the system in a way that a steady state may take a long time to occur (or may never occur) as market participants end up making decisions based on old data. Sure, it may be easier for a human to observe what's happening but it doesn't necessarily mean things will be any more stable.

Lowering the latency to trade is equivalent to increasing the bandwidth of the components in the system, helping the steady state to be reached sooner. Yes, in the worst case, this might allow the feedback loops to veer outside the stable region within the blink of an eye, but that's why there are things like safety cut-offs.

I agree that at first glance it seems that 126 microseconds should be fast enough for anyone, but when you consider the sheer volume of market participants, the mind-boggling number of trades that are executed, and the complex network of relationships between different stocks, I think that having a market that can reach a steady state as quickly as possible under various "tweaks" of input parameters is probably, on the balance, a good thing.

Re:Not just useless, but actually toxic.

[Rockoon]

Try a thought experiment, does anything useful change in 126 microseconds? Bread get baked? Pizza cooked? House built? Seed planted, if you want to get rural and idyllic?

But isnt that the point?

I would think that an exchange where useful things CANT happen between the decision to buy and the actual fulfillment of the buy would be a desirable one.

Re:Not just useless, but actually toxic.

[Anonymous Coward]

I actually had something to do with their trading setup. They're using "state of the art" technology, which, frankly isn't ready, and that was the real cause of their downtime. Just looking at the shear size of their network forwarding tables immediately clarifies why it crashed, and why it will crash again.

(IP) Multicast just doesn't work (reliably) in a network of that size, and no OS is going to change that unfortunately.

Apparently doing anything else is somehow "unfair".

Re:Not just useless, but actually toxic.

[Americano]

There is no value to equalizing prices in less than a second,

You are wrong, of course. They are providing liquidity in the market - which has tremendous value, if you understand how the markets actually work, and don't just assume they're there to funnel money from investors into scammers' pockets.

Should they not be compensated for providing that liquidity? They make a (small) profit on these trades, in return for providing a ready flow of cash to support other people trying to buy and sell.

Re:Not just useless, but actually toxic.

[mcgrew]

Or perhaps the part where the admins are competent? I took a programming course once, taught by the guy in charge of the Illinois Secretary of State mainframe. He took us on a tour of it, very impressive.

But most impressive to me was that they have an average of 1/2 hour of outage per year.

Re:Not just useless, but actually toxic.

[TheTurtlesMoves]

With a chair.

Re:Not just useless, but actually toxic.

[Lobachevsky]

Liquidity isn't just about there being _someone_ willing to buy or sell; it's about the spread. Do you want to go back to 25 cent spreads from the early '90s? Most spreads today are 1 cent. If you're happy paying 25 cent spreads to get rid of automated traders, I'd say that's a bit like chewing off your arm to swat a fly. Most automated traders make anyways from 0.1 cents to 0.5 cents per share. Comparatively, retailers like E*Trade charge customers $9.99 for trades that average around 400 shares, which is 2.5 cents per share. Mutual funds like Fidelity often charge 1 to 2% management fees on investment, which is 30 to 60 cents per share on a $30 stock.

Trying to bend the rules of the market to wipe out a segment that makes 0.1 to 0.5 cents per share is silly when there's zero effort concerning E*Trade making 2.5 cents per share, or Fidelity making 30 to 60 cents per share. Professional services like Lime (a high-end version of E*Trade) charge 0.1 cents per share. No one is angry that E*Trade charges 2.5 cents per share while Lime charges 0.1 cents per share? Oh, that's right, because it's "only $9.99 !!"

That's the irony of all of this. The average person writes of $9.99 to E*Trade but the media tries to get them concerned about "costs" that are effectively 1/20th of that. I put quotes around "costs" because the spreads have come down from 25 cents per share in the early '90s to 1 cent nowadays. So the average person benefited 24 cents on the spread, and is angry that liquidity providers make 0.1 cents per share? Where was the anger in the early '90s when specialists (a cartel of liquidity providers) were raking it in, making 10+ cents per share? Where is the anger now at Fidelity _losing_ our money in 401ks _and_ charging management fees of 30 to 60 cents per share, annually?

The biggest to benefit from automated traders going away are the Larry Ellisons and other market manipulators who want to buy up companies without "moving the price up." It's all misdirection, trying to convince you and me that we're being hurt. It's the "death tax" all over again. The average person was never affected by estate tax, yet the media convinced us we should be against it, just so some rich jackasses can save money. The same deal is happening now. Rich folks want to buy out the public companies you and I are invested in, cheaply, and stealthily. They don't like automated traders sniffing their actions with pattern matching heuristics and raising the prices (benefiting long-term owners like us).

Re:Not just useless, but actually toxic.

[khallow]

Try a thought experiment, does anything useful change in 126 microseconds? Bread get baked? Pizza cooked? House built? Seed planted, if you want to get rural and idyllic?

Yes. All of the things you mention, for starters. I'm being a bit pedantic, but you do any of those activities in a long string of periods of 126 microseconds.

It surprises me how many people do a job for years and fail to understand what it is they do. You should know what a baker, pizza maker, home builder, and farmer have in common. They all trade. People like derivatives traders take that to the purest level, trading fairly abstract things, but still things with an attachment, however tenuous, to the real world. Nothing wrong with that. The trades themselves don't close factories or cause bank bailouts.

The real problem is leverage. For example, when you were a banker, how much collateral did you have to put up for your borrowed money? 1 unit per 10 of debt? More? In the real estate securities market, there were apparently people who could borrow 50 units for every unit of assets they had. I can't comprehend that level of foolishness, though I'm sure it make good bank for a time for the people who could get away with it.

Bottom line, what do you think would happen if pizza makers could get 50 to 1 leverage? I could use the pizza store I owned to borrow enough to build 50 more. I could use my car as collateral for one or more pizza stores (depending how nice it is). In a few months, we'd be up to our eyeballs in new pizza restaurant construction. There'd be incredibly specialized stores catering to the gay, vegan, Hispanic boardgamer.

And after the bust, when people realize that they didn't like pizza all that much? Pizza would be vilified, an epithet for people who need something to hate. Pizza makers would be scoundrels of the Earth who don't make anything connected to the real world, unlike bread bakers, home builders, farmers, or even the investment banker. Much would be made of their negative impact, such as factory closures and bank bailouts (paid by the taxpayer), for example. Even pizza makers would be self-flagellating themselves over their worthlessness.

The above is an interesting sociological phenomena, but the lesson boils down to high leverage causes massive fuckups every time no matter the industry, no matter how "real" the product is, and is the number one cause of market crashes and trigger for recessions.

Re:Not just useless, but actually toxic.

[hoggoth]

You cannot come up with a procedure or technology that will defeat greed.
One trade per second per institution? They will register 1,000 institutions and have their trades auto-distributed throughout their sub-companies.

Re:Not just useless, but actually toxic.

[TheLink]

Describing this as getting sued for outsmarting an algo is pretty misleading. The traders in question did find some flaws in the algo, but rather than exploiting them directly to profit from the algo machine, they used the algo to manipulate the market as a whole, so they could profit from that. They understood what would happen when they started manipulating the algo, and they should have understood that market manipulation of this kind illegal.

Misleading? Illegal?

Go see one of the links I posted: http://www.nytimes.com/2009/07/24/business/24trading.html?_r=1

Quote: "High-frequency traders often confound other investors by issuing and then canceling orders almost simultaneously. Loopholes in market rules give high-speed investors an early glance at how others are trading. And their computers can essentially bully slower investors into giving up profits -- and then disappear before anyone even knows they were there"

Sure looks like one rule for the HFTs and another for the rest.

If you don't think the HFTs do all that and worse, you can google for evidence yourself.

Re:Not just useless, but actually toxic.

[TheTurtlesMoves]

And that is *exactly* what the all the other traders are doing. Running computerized systems doing things like stuffing and canceling etc for their own gain. But why is that they are not sued? They are the sanctioned ones.

You can't have this much perfect trading without "working how the computerized systems would react to certain trading patterns" for their own gain.

But between this, and other exclusive rights (ie naked short selling etc) to "special" status traders that makes this and other parts of the financial sector a farce.

As for liquidity and spreed. 1 second trades would achieve both just as good as the current system as far as the over all market is concerned. Perhaps not for the 100us traders thou.

Re:Not just useless, but actually toxic.

[jbengt]

So, it sounds from the article like it had nothing to do with Windows and everything to do with a flimsy system structure.

It may have had nothing to do with MS Windows. But it did have something to do with a flimsy structure that MS helped build, with lots of .Net and C# goodness and integration with MS Ofiice. MS advertised it loud and clear at the time as an example of how MS Windows was chosen over Linux, how MS technology was well worth the small extra costs, and how MS could deliver robustness and speed that Linux couldn't.

Re:Not just useless, but actually toxic.

[Tom]

For an investor with much more at stake, it is easy enough to see how a one-second interval could be make-or-break.

Seriously? If a one-second price difference can make or break an investor, don't you think that is ample proof that the markets are way, way too volatile? There is nothing left of real price-finding if these differences can happen in those times. The real world doesn't change that fast, and last I checked investments are about real-world things (companies, goods, etc.)

Software Only?

[ticklish2day]

Is this improvement purely because of the change in software technology or were there simultaneous infrastructure and process modifications? The article doesn't really say.

Linux: 1, MS: -1

[ThePromenader]

Not so sure that the networking speed is due only to the Linux OS switchover - The LSE obviously updated its hardware too.

I'd be really be interested in the makeup of the LSE network support - do they rely on their own developers/deployers, or do they have a support deal with Linux?

Re:Linux: 1, MS: -1

[Anonymous Coward]

It was costing them so much to maintain their systems due to support and modification contracts that they just out and out bought an ENTIRE company whose sole product was...trading systems (For about 50 million'ish pounds IIRC).

In essence they bought a development department lock stock and barrel and it was STILL cheaper than their existing setup.

Re:Linux: 1, MS: -1

[Sean Hederman]

The software was written by Accenture with assistance from Microsoft, so that would tell you all you need to know.

Re:Linux: 1, MS: -1

[JohnFluxx]

If you call Microsoft fanboys, then sure. Microsoft did a huge ad campaign about how the LSE switched from Linux to Windows, proving that Microsoft was ready for the big time.

Re:Linux: 1, MS: -1

[Sean Hederman]

Okay, well to anyone who's ever had to work with Accenture code, it would tell them a lot.

I agree wholeheartedly that it has nothing to do with MS vs Linux, I think it has to do with another shoddy Accenture implementation. Even the .NET decision has nothing to do with it IMO, I'm a firm believer that algorithms and design have far more impact than OS or language choice.

Oh, and calm the hell down. It's a discussion, not a flamewar.

Re:Linux: 1, MS: -1

[flyingfsck]

Well, obviously the LSE wanted a real-time system and Accenture and Microsoft used .NET, which was a total failure on their part. You cannot do real-time with .NET - Idjits...

Then on top of being dog slow, it fell over, costing the LSE a ton of money. So they probably implemented it with an Access DB and Exchange mail server as well.

So, MS touted this as a major win and then fell on their asses.
1. Euphoria:
http://web.archive.org/web/20080303191622/www.microsoft.com/casestudies/casestudy.aspx?casestudyid=51828

2. Reality:
http://blogs.computerworld.com/london_stock_exchange_suffers_net_crash

3. Tux to the rescue:
http://www.computerworlduk.com/news/networking/3244936/london-stock-exchange-smashes-world-record-trade-speed-with-linux%22%22

4. The dead cat bounce?
http://moneycentral.msn.com/investor/charts/chartdl.aspx?symbol=MSFT&CP=0&PT=11

I love this "Ad" by Microsoft:

[ClarkMills]

http://www.youtube.com/watch?v=BwSM55bsCrM

I could watch it over & over... It puts a smile on my face... :)

http://news.cnet.com/8301-13846_3-10036286-62.html

Cheers... Clark

Communist Linux

[Anonymous Coward]

Communist Linux - bringing speed and efficiency to the dregs of capitalism.

Re:Communist Linux

[shutdown -p now]

It all goes as planned, comrade. Remember: the faster the capitalists trade, the quicker they will sell us the rope with which we will hang them! ~

Re:Communist Linux

[clang_jangle]

Ever had to copy large files with Windows Explorer? Linux may have an IO issue compared to FreeBSD (for instance), but compared to Windows it totally rocks.

Gee

[TubeSteak]

The record breaking times were measured on the LSE's Turquoise smaller dark pool trading venue, where trades are conducted anonymously.

Dark pools are part of the problem.
Transparency is critical for a functional marketplace.
Dark pools only require trades to be listed after the fact...
Which isn't as useful as it sounds, even if brokerages weren't completing the trades in/across-house, where disclosure is not required.

Anonymity and secrecy are anathema to a functional market

The year of Linux desktop...

[mathfeel]

1. Create a super fast OS that take over the world's stock trading
2. Ruin the economy so that no one can afford to buy proprietary product any more
3. ...
4. Linux on every desktop!!!

trade speed

[Eivind]

Trade-speed is irrelevant to investors.

It's relevant to highly speculative robot-trader algorithms that try to make a profit by arbitraging sub-second timing-issues. But this is a zero-sum game: one trader can only gain $X by taking advantage of timing if other traders lose PRECISELY $X, so to the sum of traders, this is irrelevant.

Stock-exchanges, make a living trough fees. The fees are coupled with volume, i.e. a broker that has a larger volume of orders, will pay higher fees.

So lower latency is good for the stock-exchange, neutral for traders on equal grounds and negative for those suckers who play at daytrading. It -does- tilt the table towards those with machinery though, but the effect is irrelevant for traders who aren't extremely short-term.

In short: yet another reason to invest rather than speculate.

If you buy and sell 20 times today, each time with the table tilted a tenth of a promille against you, you'll on the average lose 2 promille, plus the fees. This doesn't sound like much, but a trader that does this 200 days a year, will have lost 20% of his profit to the tilted table. (if his flat-table profits where less than 20%, he'd thus run a minus)

Meanwhile, the investor, who holds stock on the average 5 years, will also lose a tenth of a promille in every transaction, but since he's got 2 transactions in 5 years, that works out to 0.4 transactions/year -- thus his loss relative to the flat table is 0.4 * 0.01% = 0.004% pro year, which is irrelevant.

Re:Light

[dakameleon]

Yep, and major trading firms will do anything to get closer to the exchange servers. I worked for a Major Bank which had a major data centre well outside London which hosted all the "slow" apps, and a small (but well cooled) server room in the City a few blocks from the LSE building. Each and every app in the central data room had to justify its need, and every so often you would hear about acquisitions of real estate closer still.

This is of course pre-2008; I'm no longer so intimate with the details of server rooms at major banks. C'est la vie.

Microsoft, get these facts!

[Idaho]

Remember that this very stock exchange moving to a purely Microsoft/.NET based solution was widely touted in Microsoft's so-called 'Get the "Facts"' campaign. Microsoft was involved (with Accenture) in the implementation of the project, not just in selling some Windows licenses. So this screwup should really be a PR disaster for them. If Microsoft themselves cannot even get a .NET project to work in places where their Linux-using competitors have no trouble at all (Chi-X is also Linux-based), then that sure looks like a platform in trouble to me.

Remember that the entire thing crashed down for an entire trading day, something that you can imagine didn't go over well, and together with the high latencies and other numerous problems, was the reason they dumped it for Linux.

Re:Microsoft, get these facts!

[wrook]

As much as I want to agree with you, it's really pure speculation. Projects fail for a huge number of reasons of which computing platform is just one. It might be a PR disaster, but not for any legitimate reason. I daresay it is not impossible to build a decent trading system on Windows/.NET. I have implemented systems in .NET before and while it's not my platform of choice I don't really recall anything about it that should be a show stopper here.

But while we're speculating, it would be interesting to imagine a project failing precisely because of the hype about .NET. Most good programmers understand that a problem can only get as simple as it can get. After that no tool is going to help you make it simpler. But MS (and virtually all other proprietary tool vendors) promise that their tools can make projects magically simple. The only ones that get fooled into believing this are managers and bad programmers. These are the people who tend to flock to such projects.

So, it seems possible that a project could self-select itself for failure based on unrealistic expectations of the computer platform they are using. Well, when I say "it seems possible", what I mean is I've seen it happen time and time again ;-) Whether it was the case here, I doubt I'll ever know. Bad programmers usually have no clue why their projects fail (or serendipidously succeed). That's why they are bad programmers.

How scientific is this?

[bertok]

I'm willing to bet that this has little to do with Linux.

It's a great server OS, sure, but lets look at this realistically:

- the Windows / .NET trading system was based on Windows 2003 and SQL 2000, and was deployed in 2005.
- the Linux-based system is under development now, to be deployed next year.

Just based on that, you'd expect substantial performance differences from just using newer hardware. Chances are that the original kit was certified as a part of the solution, and hasn't been replaced since. With all-new gear, I'd expect about 2-3x the CPU performance, and if they're using 10GbE (likely), then 10x the network performance.

Even ignoring the hardware and the OS, one would expect 90% of the performance to be determined by the application, not the OS. Decisions like writing the software in .NET versus C or Java, or using a special-purpose Java runtime would make a huge difference, irrespective of the OS.

On top of this, the software stack is completely different, and developed by a different team. Just about every design decision, small and large, will be different.

To make a fair comparison, you'd have to run the new software on both OS platforms, on the same hardware.

Re:How scientific is this?

[jimicus]

The sort of person you see applying for that and getting it is the sort of person who has testicles so big they cart them around in a wheelbarrow. The sort who you see on The Apprentice and want to punch in the face because they can't stop going on about how wonderful they are.

Their actual ability may not be even remotely correlated with this.

Re:Light

[Nursie]

The world of high finance has become just a bunch of racks frantically swapping bits around.

Yet when it screws up, the shocks are felt everywhere, for some reason.

Something is sick on this planet, when automated behaviour of electronic systems decide who eats, who can buy a new mansion, who gets a miserably low pension, whose house is going to be taken away and who's going to pocket a billion dollars in profit.

I'm more and more coming over to the side of those that say the whole finance sector is parasitic in nature and needs to be destroyed.

Re:1 per second? Not even that

[skegg]

For those who may not know, these are known as trading halts.

What makes me furious is looking over historic share price graphs and observing share prices rise a day or so *before* a company makes a positive announcement (e.g. a huge mineral find, scientific breakthrough, profit increase, etc).

Re:Yeah, but

[oji-sama]

Bender runs Linux? Cool.

clearly not: prices are chaotic, fractal, etc.

[r00t]

Prices are discrete, quantized, non-differentiable, etc.

Prices are chaotic and somewhat fractal.

Going faster does not solve this. Think of sign(sin(1/x)) as x approaches zero; it changes rapidly but this doesn't make it smooth.

Hourly trades would be reasonable. You get a few minutes to submit secret bids, the exchange gets nearly a half hour to match them up, the exchange gets a few minutes to publish results, and you get nearly a half hour to decide on your next bid.

There is no reason that the finances of normal corporations and normal investors should be subjected to the abuse of today's stock market.

Re:clearly not: prices are chaotic, fractal, etc.

[Pinky's Brain]

This is far too sensible to ever happen.

Re:Wait up zealots.

[_Sprocket_]

Why oh why do people have a need to spread reverse FUD and give "linux" props it does not deserve?

Because Microsoft highlighted the TradeElect system in their "Get the Facts" campaign. Oddly enough, if you read the press kit Microsoft put together, you'd get the impression that a recent version of Windows and an optimised application was in place and doing very well. Maybe Linux does get some small slice of kudos after all.

http://web.archive.org/web/20070706203521/http://www.microsoft.com/windowsserver/facts/casestudies/lse.mspx

speed is counterproductive

[Tom]

One shouldn't forget that these high speed tradings are not in the interest of investors, companies being traded or other market participants with a real-world interest. They serve only the high-speed/high-volume speculative traders, specifically algorithmic or automated traders.

Even Wall Street is slowly waking up to the problem:
http://online.barrons.com/article/SB50001424052970203952604575552190237324972.html?mod=BOL_twm_mw

This was a bomb about a week ago when it was published, the guy making those statements is a Wall Street billionaire, not a hippie communist.

Planet Money

[VValdo]

Trading this fast brings the market closer to optimal economic efficiency, where prices at any instant accurately reflect value. Latency contributes to the very inefficiencies that you blame these "large investment firms" from profiting off of.

Let's just relax and listen to this episode of Planet Money on high-frequency trading.

I know. It's NPR. They fired Juan Williams. Whatever. (FWIW: on the Diane Rehm show from Friday, they defend Williams, say there was a "rush to judgement" and say that NPR went "off the handle". You'd NEVER see most news employees do that on-air.)

W

Re:1 per second? Not even that

[The Master Control P]

The idea of government only preventing someone from directly interfering with the freedom of others sounds great until you realize that (1) everything everyone does affects everyone else, so the only way to actually satisfy this constraint is for everyone to do nothing, (2) not only is it possible to harm people through second-order and higher effects, that's the overwhelmingly dominant means by which people in industrialized countries come to harm today, so relaxing the constraint to not directly harming others is effectively useless, and (3) the relationships between cause and effect are, a large majority of the time, of such high order that accurately and objectively assigning blame/responsibility for harm is effectively impossible. The world is vastly too complex to be effectively managed by an idea so simplistic or black & white.

Absent the availability of a superhuman-class intellect that's both able and willing to solve the optimization problem, we settle for global stability constraints. Stamping out actions whose only tangible effect is to crash whole stock markets so hard the operators hit the big red "Shut. Down. Everything." button sounds like a damn fine constraint to me. Or, "your freedom to be a greedy dick or a panicking moron ends where the viability of the world's economy begins."

Re:PR Rubbish

[Robert Zenz]

...and more to do with badly designed and implemented software.

So we are back to Linux vs. Windows, huh? ;)

Re:1 per second? Not even that

[shutdown -p now]

So, yeah, let them make money off people who aren't as good at stock trading as fast as they like. Doing otherwise would basically be telling them they're not allowed to make any more money because you find the amount they already have distasteful. Pretty much 100% sour grapes.

If the only outcome of people trading on the stock market and failing was less $$$ in their pockets, I couldn't possibly care less - just as I don't care about casinos and lotteries.

The problem is that, when stock markets fuck-up big time (again), the ripple effect is severe enough that the only way to avoid it is to stock up on supplies and bug out to the woods. We've seen this in practice more than once already. Since, in the end, I somehow find my paycheck been affected, I feel perfectly entitled to advocate for stock market regulation.

Your freedom ends where my nose begins - but, in a working society, we all have our noses stuck into each other's business, so in practice the point is moot.

THIS

[Joce640k]

If you want to stabilize the global economy put a tax on all stock trades. Stocks and shares should be long term planning, not microsecond.

Re:THIS

[asc99c]

Yet oddly, in the UK at least, there is a tax on actually buying shares, so my long-term investment account has various charges for stamp duty as my money goes in there. The tax is only applied to buying actual shares. It isn't applied when messing around with futures and complex derivatives etc that have caused the problems.

I think this needs to be exactly the opposite way around. I don't think there should be a tax for dealing in shares, but instead a tax on dealing with various futures products. Not too severe a tax but enough to dissuade this sort of high speed speculation.

Open source widens the gap between rich and poor

[captainpanic]

This stupid system makes it possible to earn a massive amount of money by buying and selling shares at the right time. The really stupid thing is that at some point, the money earned with those transactions can be exchanged for real goods, produced by real people.

People who don't add anything tangible to this world get free money, and can buy goods for it. It's madness. If I hadn't grown up in this world, I doubt that I would ever understand and accept it...

Re:Offtopic - for gods sake why?!@

[Alioth]

Go into your preferences and turn Discussion 2 off.
There is a bug in Slash that means (or at least a week ago, meant) that the settings don't always save first time so you may have to try a couple of times.

I agree, Discussion 2 sucks (it uses masses of CPU time and any discussion with more than a couple of hundred comments requires an 8 core system to merely run at a snails pace). I wasn't all that pleased they turned it on for me when I've had it switched off, I've got rid of it now.

*sigh* This again

[Anonymous Coward]

Arguably the most important idea of communism was that workers own the tools of their trade. In traditional sense, this could mean (Marx didn't really go into the details of the implementation) that workers of a factory democratically vote for all the important issues (wages, etc.) and as such the workers benefit from their work (as opposed to one guy at the top pocketing the money) if they do it well... and have to tighten the belt or begin doing something else if they do the job is unnecessary or done poorly. There was more about the utopia that this would lead to, but that was the primary concept.

It is indeed true that socializing medicine has nothing to do with communism. Socialism means that government owns the production facilities, Communism means that workers own them, Capitalism (In original meaning of the word, not as a synonym for "free trade") means that some other private entity benefits from the people who work for him. The three are mutually exclusive concepts and communism is at least as far (perhaps further) away from socialism than capitalism is. After all, communism and capitalism both rely on question and demand while socialism includes the idea that some things aren't economically feasible but should be provided for the people anyways. Communism is effectively capitalism where workers of a company own all its stock and each worker owns a fair portition (Not necessarily "equal" as people who have worked there longer could own more because of that and it would still be canon).

Now, Linux is - to some extent - communism. It obviously isn't socialism (no government owns it) and it isn't capitalism (nobody at the top owns it and benefits from the people who work for him) but rather the community (the people who work to develop it) own it, own the tools to develop it, make decisions about it and benefit from their work for it. So, while it is a project, not a economic concept (So you can't say "Linux is communism". Communism is communism. Linux is Linux.), it certainly is based on a lot of the ideas that make up the foundation of communism.

Markets

[captain_dope_pants]

The stock market used to be full of bears & bulls. Now it has penguins too :)

Re:Light

[dintech]

Co-location. A lot of exchanges will let you put your servers in their building. Then the arguments start about who's network cable is shortest and which router it's on. I'm not joking.

Re:1 per second? Not even that

[Anonymous Coward]

As for others actions indirectly, adversely affecting you? That's life. Get used to it because it is never going to change. We're not entitled or promised a safety net and anyone trying to give us one wants our freedom as the price. A bit here and another bit there; eventually it's gone.

Yeah, it always starts with regulating traffic and ends with concentration camps. There is absolutely nothing in between but one giant slippery slope.

Re:1 per second? Not even that

[The Mighty Buzzard]

What you say in jest, I say in seriousness. Fortunately it usually happens over many lifetimes.

You need to read more before commenting

[schon]

It's a great server OS, sure, but lets look at this realistically:

- the Windows / .NET trading system was based on Windows 2003 and SQL 2000, and was deployed in 2005.
- the Linux-based system is under development now, to be deployed next year.

You missed

- the Windows / .NET trading hardware has been upgraded continuously because it was unable to cope with the load.

Just based on that, you'd expect substantial performance differences from just using newer hardware.

Sure, except for the part that the both are running on new hardware.

Chances are that the original kit was certified as a part of the solution, and hasn't been replaced since.

"Chances are" - except that is 100% wrong. They had problems since day 1, which were blamed on the hardware, so they've been constantly upgrading it trying to fix the problem.

Even ignoring the hardware and the OS, one would expect 90% of the performance to be determined by the application, not the OS. Decisions like writing the software in .NET versus C or Java, or using a special-purpose Java runtime would make a huge difference, irrespective of the OS.

The old system was written with the help of MS. They were the ones that said that .NET was the best way to implement it, and they even touted this in their press releases.

On top of this, the software stack is completely different, and developed by a different team. Just about every design decision, small and large, will be different.

Of course it's completely different - that's the entire fscking point.

Re:Light

[L3370]

Actually even in Somalia, one of africa's most volatile regions, there is a thriving stock market that is ruining (enriching?) there lives. http://www.npr.org/blogs/money/2009/12/a_pirate_stock_exchange.html Oddly enough, Somalia would be a pure Libertarians dreamland. No taxes, no real government to fuss with, and everyone is free to set up any enterprising business.

Bonus points if guns are used to make that business even more profitable.

126 microseconds what it cant do

[tempest69]

126 microseconds is the time light can travel about 38 kilometers. So NO, packets are not traveling far in that time. it's near the latency of standard Gig-E, so traders use Infiniband. And get closer to the exchange, as every 30 meters is a microsecond of advantage.

Re:Light

[TubeSteak]

Co-location. A lot of exchanges will let you put your servers in their building. Then the arguments start about who's network cable is shortest and which router it's on. I'm not joking.

Ultimately, the solution to all this is to give the exchange a heartbeat and to only execute trades on those beats.
Randomize the queued orders that accumulate between the beats and we can finally kill off high frequency trading.

Equal access is one of the prerequisites for a perfect market