Low-Latency Network Shaves Milliseconds from UK-Asia Traffic

if you have to use this youre doing it wrong. by Anonymous Coward · 2011-09-24 13:22 · Score: -1

best to set up an office and park your staff across the street from the exchange.
hint: the rent for an office is far cheaper than using this connection 24 x 7.
FYI: law firms will not be helped by this.

Re:if you have to use this youre doing it wrong. by LilBlackKittie · 2011-09-24 13:29 · Score: 1

Traders who make money through "arbitrage" need access to more than one exchange — they're making money off the price differences of securities on each. They justify this as being beneficial to the market, because they're making prices equal across the world. Guess it's just coincidence that it's beneficial to their bottom line too, eh?
Re:if you have to use this youre doing it wrong. by petermgreen · 2011-09-24 13:31 · Score: 1

Sure but each office can only be across the street from ONE exchange.
Currencies, commodities and some shares are traded on multiple markets. If you own the first computer to spot a difference in price between the same item in different markets then you can make money by making a buy in one market and an equivilent sell in another. The faster you can exchange data the lower the risk that someone else will get there first.

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Re:if you have to use this youre doing it wrong. by MightyYar · 2011-09-24 13:46 · Score: 1

because they're making prices equal across the world.
They also improve liquidity.

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Re:if you have to use this youre doing it wrong. by sycodon · 2011-09-24 15:56 · Score: 1

Great, all we need is a faster way to orchestrate a market crash.

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Re:if you have to use this youre doing it wrong. by timeOday · 2011-09-24 16:19 · Score: 1
But are they vacuuming up all the gains?
I have a question that may or may not be related. I keep asking but haven't heard a good answer.
1. 1) Although many people own a little stock, most equities are owned by just 1% of the population. The bottom 50% owns 0.5%.
2. 2) Stocks went down overall in the 2000's.
3. 3) And yet, wealth inequality grew during the 2000's; the rich continued to get richer while everybody else got poorer.
How is that possible? Why hasn't the weakness of the stock market and real estate leveled the distribution of wealth? If high-frequency trading, or insider trading, or anything "unfair" has happened on a large scale, it should be detectable because the distribution of returns should be more skewed - that is, the best should be beating the market by a wider margin than before. Are they?
Re:if you have to use this youre doing it wrong. by Arlet · 2011-09-24 18:26 · Score: 1

No, it's not a coincidence. A lot of people that are producing things that are beneficial to others are contributing to their own bottom line when doing so. In fact, most people do exactly that.
Re:if you have to use this youre doing it wrong. by Anthony+Mouse · 2011-09-24 19:25 · Score: 4, Insightful

It's possible that HFT is contributing to it to some small extent, but I would think that other factors would have more to do with it. For one thing, the super rich have highly diverse investments. They own stocks, but also government bonds, corporate bonds, land, commodities, etc. It is very rare that all of those things go down together, and in fact usually when one of them goes down another goes up. They also have a bunch of high-priced investment advisers whose entire job it is to make sure they aren't on the losing side of the deal and that if they might be then it's properly hedged.
On top of that, a lot of these people outright own a large private company, and a lot of those companies will regularly beat the market because they're run by the owners rather than officers overly focused on quarterly profits and afflicted with the principle-agent problem.
The thing that concerns me about HFT is that it's quite possibly a significant cause for why the stock market is doing so poorly. Think about it: If the HFTers shave a penny or so per share off of each trade between exchanges, future prospective buyers will be willing to pay that much less for their shares, because they know that when they ultimately sell them they'll suffer the same loss again to the HFTers. In consequence the seller is obligated to lower the price by that small pittance per share in order to make the trade, which sets the new market price for the stock. The value of the stock will continue to go down until it accounts for the amount of value the HFTers remove over the period of time that the average investor holds the stock.
The more the HFTers make over a given period of time, the less the stock is worth to "real" investors. More to the point, if the "true" value of the company does not increase faster than the speed at which HFTers remove value from stockholders through arbitrage, the value (and therefore stock price) of the company will continue slowly falling indefinitely, because no one will want to buy shares that will post-arbitrage be worth less than they paid for them. (In practice what will happen is that the value will fall until the only remaining investors holding the stock will be long-term investors, who reduce the value removed by HFTers because they no longer have a sufficient volume of trading to arbitrage, and so the stock will stabilize at a non-zero price where the value of the company is increasing faster than the arbitrage removes, but at a much lower value than it would be absent HFT.)
Re:if you have to use this youre doing it wrong. by umghhh · 2011-09-24 21:57 · Score: 1

liquidity and equalizing the prices across different exchanges are admittedly benefits of arbitrage. Yet doing it in millisecond is not only pointless but benefits only some of the agents in the trade. Then again speeding up the networks is a good thing only this purpose is at least doubtful. For the purpose of arbitrage I think trading every minute is good enough. Real world and real economy is not changing that fast at least we humans do not perceive it so. Already the fact that we talk about real economy and the rest (i.e finance world) is telling.
Re:if you have to use this youre doing it wrong. by Arlet · 2011-09-24 22:58 · Score: 1

Doing it in milliseconds rather than a minute reduces the risk for the trader.
Buying some stock in Asia, and selling it a minute later in New York carries a much bigger risk than selling it 0.1 seconds later. A minute may seem short to you, but when you spend all day doing those trades, a window of a minute means 600 times the risk of a 100 millisecond window that the price of the stock will change.
To offset this 600x bigger risk, the trader needs to have bigger profit margins on the trade as an insurance, which means a bigger price difference between global markets, which means that the average investor will get a worse price on their stock transaction.
Faster trading therefore benefits the real world and real economy.
Re:if you have to use this youre doing it wrong. by mwvdlee · 2011-09-24 23:07 · Score: 1

Yes, all very well thought out investments that will help the companies and economy grow strong for the long term.
This kind of split-second trading has to stop.

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Re:if you have to use this youre doing it wrong. by MightyYar · 2011-09-25 01:07 · Score: 1

The businesses that they own 50% of made money in that time. Lots of money.

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Re:if you have to use this youre doing it wrong. by maxwell+demon · 2011-09-25 01:14 · Score: 1

That higher risk only exists if the price can change at such a small time scale. Higher trading frequency decreases the time scale at which the price can change, and therefore does not give the high frequency trader a lower risk, but instead increases the risk for any non-high-frequency trader. Basically, it doesn't matter at which frequency you clock your market, as long as that frequency is higher than the relevant real economic frequencies. Which are certainly not measured in milliseconds. However, the faster your market works, the less time you have to react as soon as something goes wrong.

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Re:if you have to use this youre doing it wrong. by Arlet · 2011-09-25 02:40 · Score: 1

Information relevant to the market comes in at all times of the day. For instance, in the middle of a trading day, news could come out that a company has a major setback, like an explosion on a big plant. If a trader was just in the middle of a stock transaction, having bought some cheap shares in Asia, and trying to sell these in London for a penny more, and this news hits the market, all of a sudden the buy offer may be canceled, and the trader is stuck with overpriced stock.
For Joe the investor, it is pretty unlikely that he's going to have a buy order outstanding right at the moment that the bad news hits the market, and somebody dumps his shares on him for his overpriced offer. For a high frequency trader, who's constantly doing trades in thousands of different companies, he has a much bigger exposure to these upsetting events, especially if he's required to hold them for a minute. The fact that bad news for a particular company is a low frequency event doesn't matter.
Re:if you have to use this youre doing it wrong. by smellotron · 2011-09-25 07:02 · Score: 1

Think about it: If the HFTers shave a penny or so per share off of each trade between exchanges, future prospective buyers will be willing to pay that much less for their shares, because they know that when they ultimately sell them they'll suffer the same loss again to the HFTers. In consequence the seller is obligated to lower the price by that small pittance per share in order to make the trade, which sets the new market price for the stock. The value of the stock will continue to go down until it accounts for the amount of value the HFTers remove over the period of time that the average investor holds the stock.

While you are talking about HFT specifically here, this is an issue generic to traders using market-making strategies. The presence (or absence) of market makers should not depress the price of a stock, but it will definitely impact the bid/ask spread. You are imagining the "penny shaving" from a buyer's perspective, but market makers view buying and selling as mostly symmetric (buy low, sell high; or sell high, buy low), hence why the spread is impacted and not the "price". In actuality, HF market makers are competing with each other for increasingly small penny-shavings, and they're able to do so because reduced latency leads to reduced risk.
Regardless, a long-term investor is looking profit at least an order of magnitude above the cost of liquidity, so none of this should matter to Joe Sixpack and his 401k.
Re:if you have to use this youre doing it wrong. by Anthony+Mouse · 2011-09-25 09:44 · Score: 1

You are imagining the "penny shaving" from a buyer's perspective, but market makers view buying and selling as mostly symmetric (buy low, sell high; or sell high, buy low), hence why the spread is impacted and not the "price". In actuality, HF market makers are competing with each other for increasingly small penny-shavings, and they're able to do so because reduced latency leads to reduced risk.
I am imagining it from the perspective of anyone who is not a "market maker" -- someone who intends to hold the stock for more than a minute.
Let's take an example. A company has 1000 shares of stock. 800 are held by long-term investors who all intend to keep them for at least a year as long as nothing drastic happens. 200 are held by short term investors, who each intend to sell them within a short period of time X. The buyers for those 200 shares in turn intend to hold them each for another X period and then sell them again to another short-term investor, and so on indefinitely.
Now let's say that the "true" value of the company will increase by 2 cents/share every period, and everybody knows and expects that. Moreover, the short-term investors demand that profit of 2 cents per share every period at the current stock price, otherwise they'll take their money elsewhere and buy bonds or commodities or something. If there are no "market makers" then every period the short-term investors sell their stock for 2 cents/share more than they bought it for previously. Now enter the market makers. Let's say that for each trade, the market makers take an average of 1 cent/share.
Look at the chain it creates: The prospective buyers in the first period demand a 2c/share profit over the next period; they won't buy the shares for any more than what is necessary to achieve that. They know the market makers will take 1c, so what they demand is a 3c increase in the bid price over the period that they hold the shares. Based on the fundamentals the price will only go up 2c however. No one will pay more than the share is worth at the end of the period, so to create the required difference the immediate share price must go down by 1c.
But wait, there's more: The same dynamic will exist in the next period: The buyer in period two demands a 2c profit, which requires a 3c bid price increase over one period, and the natural value will again only increase 2c. In consequence the bid price for the stock in period two will be reduced by 1c/share. The buyer in period one realizes this, and still demanding a 2c profit, will now bid 2c/share less than due to the market makers -- 1c to cover the market maker's cut on this trade and 1c to cover the amount the next bidder demands to cover the market maker's cut on the next trade. And it goes on like this, driving down the current-day price of the stock because short-term investors are willing to pay less and less for it because the HFT market makers are over time predicted to consume that portion of their expected profits.

Regardless, a long-term investor is looking profit at least an order of magnitude above the cost of liquidity, so none of this should matter to Joe Sixpack and his 401k.
So you're looking at it from the perspective of the long-term investor and saying that it doesn't matter to them because they're going to buy for $N/share and sell for $2N/share, and the penny or two per share shaved off at the back by a market maker doesn't matter one lick to him because it's 0.5% of the profit. The trouble is that most of the buyers on the market at any given time are the short-term investors. Long-term investors go years without buying a share; they are not regularly available as buyers to other long-term investors. So when it comes time for a long-term investor to sell his shares, the value of the shares to the short-term investors is what matters. If the market makers materially decrease the value of the shares to those short term investors, it will correspondingly impact the price at which the long-term
Re:if you have to use this youre doing it wrong. by xelah · 2011-09-25 10:32 · Score: 1

Your link doesn't claim that wealth inequality grew, it claims the income inequality grew (which is true for the US....IIRC within country inequality is mostly growing, worldwide inequality mostly falling). The share of income taken in return on capital (dividends and suchlike) has risen over 10 years in the US, and the share taken by labour has fallen. That can easily happen when, for example, corporate profits are increasing. I can't find an original source, but there's a graph here: http://www.frumforum.com/incredible-shrinking-workers-income
Re:if you have to use this youre doing it wrong. by smellotron · 2011-09-25 14:09 · Score: 1

I am imagining it from the perspective of anyone who is not a "market maker" -- someone who intends to hold the stock for more than a minute.

Regardless of the holding duration, that's a buyer.

Now let's say that the "true" value of the company will increase by 2 cents/share every period, and everybody knows and expects that.

This is not a valid premise—the behavior you are describing is more fitting for bonds, or perhaps dividend-bearing stocks (where the $0.02/share is reflected in cash rather than an increase in the worth of the existing shares). In reality, stock prices are very volatile, and trading activity on exchanges serves to give all observers a reasonably clear view of the "consensus" value. Nobody knows the "true" value of a stock, hence the volatility.
Your further analysis basically comes to the conclusion that market makers remove capital from the system, depressing stock prices. Among other things, this ignores the set of participants who lose money on their trades. This could be investors who expect the stock to move up $0.02 but stop-loss out when the stock instead moves down $0.05. Or this could be market makers who expect the stock to hold its price, but stop-loss out when the stock instead moves $0.02 against their current inventory. These "losers" are effectively infusing more capital into the system.
Furthermore, anyone who doesn't want to pay for immediacy doesn't have to. You can submit a limit order for a specific price, and wait for the normal volatility of the market to come to your limit price.

...they're going to buy for $N/share and sell for $2N/share...

Just to give you an idea about the scale, my armchair analysis is considering participants who buy for $N/share and sell for $N*1.05/share. That sort of target is suitable for speculation on quarterly reports.
Re:if you have to use this youre doing it wrong. by Anthony+Mouse · 2011-09-25 14:49 · Score: 1

Regardless of the holding duration, that's a buyer.

Not if they already have the stock and are deciding when to sell it.

This is not a valid premise
The premise is not required, it is only a simplification to make the explanation easier. Let me put it a different way: Suppose that in the world without market makers, the majority of people would expect it to go up by approximately the specified amount. I am only trying to create a baseline in order to analyze the effects of modifying it.

Your further analysis basically comes to the conclusion that market makers remove capital from the system, depressing stock prices. Among other things, this ignores the set of participants who lose money on their trades.

Unless you are trying to argue that market makers on average have non-positive net profits, I'm not sure what this is supposed to be buying you.

Furthermore, anyone who doesn't want to pay for immediacy doesn't have to. You can submit a limit order for a specific price, and wait for the normal volatility of the market to come to your limit price.

That is something the seller can do regardless of the effect I'm talking about, so I'm not sure how it is relevant.
Re:if you have to use this youre doing it wrong. by smellotron · 2011-09-25 16:10 · Score: 1

Regardless of the holding duration, that's a buyer.

Not if they already have the stock and are deciding when to sell it.

I apologize for being unclear. What I mean is that your[1] participation strategy in the stock market is to buy stocks, let them appreciate, and then sell them. Your profit when stocks you own appreciate during your holding period. This is in contrast with market makers who profit when stock prices don't change during their holding period.

The premise is not required, it is only a simplification to make the explanation easier.

Your subsequent explanation was based on an assumption of reliable appreciation of a stock. The simplification is too distant from the reality of the stock market for the explanation to remain valid.

Unless you are trying to argue that market makers on average have non-positive net profits, I'm not sure what this is supposed to be buying you.

I am referring to all participants having a chance to lose. However, you do bring up a good point. The biggest exchanges in the stock market offer rebates for providing liquidity and charge (slightly larger) fees for taking liquidity. In terms of trading, market makers on these exchanges can have net losses and still make a profit because of the rebate. This is the real penny-shaving.
[1] the proverbial "you", not the Anthony Mouse you.

lets talk about... by Anonymous Coward · 2011-09-24 13:24 · Score: 2, Insightful

We can talk about how scumbags are ruining the market again...

Re:lets talk about... by Anonymous Coward · 2011-09-24 15:49 · Score: 3, Informative

lets trade faster and faster with micro sums of money and waste ultra low latency networks for no reason... What's next, wasting massive amounts of electricity to to generate fake money? idiots....
Re:lets talk about... by Anonymous Coward · 2011-09-24 16:43 · Score: 0

Perhaps minimum hold times along with random delays and a lottery for bids that come in within a given time interval?
Re:lets talk about... by sxpert · 2011-09-24 19:05 · Score: 1

man where are modpoints when you need'em !!
Re:lets talk about... by sxpert · 2011-09-24 19:09 · Score: 1

nah, just tax the profits to the death when holding time 1 month
Re:lets talk about... by sxpert · 2011-09-24 19:10 · Score: 1

that should have read "less than"
Re:lets talk about... by kmoser · 2011-09-25 16:54 · Score: 1

"Nice network you got there. Sure would be a shame if somebody from the outside started routing lots of traffic through it, thereby degrading latency."

Putting those neutrinos to work! by MMORG · 2011-09-24 13:24 · Score: 5, Funny

Putting those FTL neutrinos to work, eh? Good job on the time-to-market, guys!

Re:Putting those neutrinos to work! by Anonymous Coward · 2011-09-24 13:35 · Score: 0

Law firms?
Re:Putting those neutrinos to work! by artor3 · 2011-09-24 14:52 · Score: 1

The original time-to-market was about 70 years, but they then used the FTL network to send the plans back to the present day. They're rolling it out in 20 ms increments to maximize profits.

It is good therefore it is evil by Anonymous Coward · 2011-09-24 13:25 · Score: 1

It makes market more efficient therefore it is evil.
It makes money therefore it is evil.

Re:It is good therefore it is evil by Anonymous Coward · 2011-09-24 14:29 · Score: 2

It makes market more efficient therefore it is evil.
It makes money therefore it is evil.
You're an idiot therefore you think you're clever.
Re:It is good therefore it is evil by Anonymous Coward · 2011-09-24 14:38 · Score: 1

You think you're clever, therefore you're an idiot.
Re:It is good therefore it is evil by Anonymous Coward · 2011-09-25 02:20 · Score: 0

You you're therefore, think idiot clever an you're.

Offensive by Anonymous Coward · 2011-09-24 13:27 · Score: -1

From the article:

"The idea is so simple, my grandmother could have come up with it"

As a 49 yo grandmother, feminist and C programmer of 20+ years I find this offensive. You would never hear this said about a grandfather.

Re:Offensive by MightyYar · 2011-09-24 13:45 · Score: 1

I find this offensive
You offend too easily. It's a common phrase, like saying "everyman" or "Joe the plumber".

--
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Re:Offensive by Anonymous Coward · 2011-09-24 13:45 · Score: -1

Niggers speak this kind of pidgin that brainwashed liberal idiots like to call "ebonics". They pretend it is another dialect and not a low-class, gutter, illiterate bastardization of American English. Thats funny. You realize that no other racial or ethnic group still has a discernable "accent" after 3 natural-born generations? In 200+ years how many generations of negroes has there been in America? Oh and get this. It's not just American blacks. In Spanish-speaking countries the niggers don't speak correct Spanish either and have also been there for many generations. They're just stupid and less capable. Why not admit it?
Re:Offensive by russotto · 2011-09-24 13:53 · Score: 1

From the article:
"The idea is so simple, my grandmother could have come up with it"
As a 49 yo grandmother, feminist and C programmer of 20+ years I find this offensive. You would never hear this said about a grandfather.
The idea isn't THAT simple.
Re:Offensive by jhoegl · 2011-09-24 14:09 · Score: 1

Or Joe Sixpack... I dont have a sixpack... I have a keg, jerk!
Re:Offensive by David+Thomas · 2011-09-24 14:21 · Score: 1

You aren't the author's grandmother. The article says 'my grandmother' not 'a grandmother'.
Re:Offensive by Anonymous Coward · 2011-09-24 14:59 · Score: 0

Nobody cares.
Re:Offensive by Anonymous Coward · 2011-09-24 15:02 · Score: 0

So what you're saying is, preserving any national identity that isn't yours is stupid? Your hateful, redneck bullshit is what should have been bred out.
Re:Offensive by Osgeld · 2011-09-24 15:08 · Score: 1

yea boo hoo you state this horseshit every chance you get, obiously your not busy enough with your special grandchilderen or your awesome career so STFU already you bleeding heart
Re:Offensive by Anonymous Coward · 2011-09-24 15:30 · Score: 0

By Black men...
Re:Offensive by johnmorganjr · 2011-09-24 15:42 · Score: 0

Are you really so ignorant? Well yes you are in one way, you made a moronic and hateful post like you did yet you were smart enough not to log in so the whole world could see who you are. I think slashdot should do away with all anonymous posting to keep the true trolls out of here and let the back wood ass rednecks show who they really are. Personally I find what you said sick and offensive, maybe you should go post on kluklux.com or wherever the hell people like you spout off at the mouth.
Re:Offensive by Samantha+Wright · 2011-09-24 16:07 · Score: 1

I wonder if said grandmother is irked by all this mileage as a rhetorical device.

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Re:Offensive by Pseudonym+Authority · 2011-09-24 16:44 · Score: 0

Why would disabling anonymous posting keep the trolls out? That hasn't kept MK out. All that would do is force them to use accounts.

Personally I find what you said sick and offensive
I concur. I find this image macro to sum the parent up pretty well.
Re:Offensive by Anonymous Coward · 2011-09-24 17:57 · Score: 0

YHBT. HAND.
Re:Offensive by MightyYar · 2011-09-25 00:17 · Score: 1

Congrats?

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W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.

GET MORE THAN THAT FREE (Using HOSTS files) by Anonymous Coward · 2011-09-24 13:29 · Score: -1

By far, & so can anyone else in 2 ways:

1.) Blocking out adbanners (which have been known to serve up malware many times in the past 7++ yrs. or more, no less)

&

2.) Hardcoding your favorite sites into it (so you avoid DNS lookups that take longer than 30-60ms or more to send back a host-domain name resolved to IP address, & also from possibly downed, OR "dns-poisoned" misdirected DNS servers)

Nice part is, it didn't cost ME "billions of dollars" to get a HELL OF A LOT MORE SPEED BACK FOR MY MONIES I PAY OUT TO BE ONLINE (as well as a hell of a lot better "layered security" to go with it), using HOSTS files...

APK

P.S.=> And, they're FREE, & data for them is as simple as pinging your fav. sites for their IP address (so you can LOCALLY "Self-Resolve" the host-domain name to IP address equation), & blocking adbanners has data widely available for it also (in addition to blocking out KNOWN bogus sites that serve up malware) for security too, such as this list of them:

http://hosts-file.net/?s=Download
http://www.malwaredomainlist.com/hostslist/hosts.txt
http://www.malware.com.br/cgi/submit?action=list_hosts_win_0000
http://mirror1.malwaredomains.com/files/
http://someonewhocares.org/hosts/
http://www.malwareurl.com/
https://spyeyetracker.abuse.ch/monitor.php
https://zeustracker.abuse.ch/monitor.php?filter=online
http://winhelp2002.mvps.org/hosts.htm
http://hostsfile.org/hosts.html
http://www.safer-networking.org/en/download/

By this point in time, since 1997 with lists of my own? I have 1.6++ million bogus sites/servers/hosts-domains, adbanner servers, & far more that's "not good for your speed OR security online" blocked-out, & my DSL connection runs MORE like a GOOD CABLE CONNECTION instead for websurfing, easily!

... apk

Re:GET MORE THAN THAT FREE (Using HOSTS files) by Anonymous Coward · 2011-09-24 13:38 · Score: 1

Man dude, while your advice may be pertinent to somebody visiting websites, this is a very different communication going on, with no web browser involved at all.
Re:GET MORE THAN THAT FREE (Using HOSTS files) by Ken+Broadfoot · 2011-09-24 13:39 · Score: 1

Anonymous is right....
Someone bump up parent post...

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Re:GET MORE THAN THAT FREE (Using HOSTS files) by obarthelemy · 2011-09-24 14:21 · Score: 1

the internet the web. The guys in the story are certainly not doing web stuff.
nice rant though.

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Re:GET MORE THAN THAT FREE (Using HOSTS files) by M.Kristopeit84 · 2011-09-24 17:27 · Score: 1

blocking ads is stealing you theif and you don't even have the guts to log in and face me

why do you cower? what are you afraid of?

cower in my shadow behind your stolen webpages some more, feeb

One step closer to their dream... by hoytak · 2011-09-24 13:31 · Score: 1

... of being able to outsource the high speed trading decisions to countries with lower labor costs, thus saving millions and increasing shareholder value.

--
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Re:One step closer to their dream... by Mr.+Underbridge · 2011-09-24 15:51 · Score: 1

If you meant coding the machines that actually make the decisions, then yes.
Honestly, I don't know why somebody hasn't made a fucking fortune tricking the high speed trading machines. Remember a couple years ago when a story about the anniversary of a plane crash got picked up by Bloomberg and fed into the machines, crashing United's stock?
http://revealingerrors.com/google_news_ual
Why hasn't somebody applied SEO skills to a fake news story in order to manipulate a stock? Sure, SEC, yada yada - but I bet tracks could be covered.
Re:One step closer to their dream... by Nursie · 2011-09-24 17:23 · Score: 2

There were a couple of guys in Sweden (IIRC) who figured out how a couple of the bots were trading, and then figured out how they could make money from that.
Guess what happened to them? If you guessed "retired on their fortune" then you guessed wrong. The right answer was that they were arrested and tried (can't recall the charge) for stepping on the big boys' toes.
Re:One step closer to their dream... by Billly+Gates · 2011-09-24 17:33 · Score: 1

"Honestly, I don't know why somebody hasn't made a fucking fortune tricking the high speed trading machines."
They already have. I saw some graphs a year ago from Goldman Sachs which showed wiggles going upward from obvious pump and dump schemes. Basically they use the FTC to change the market price and as soon as it goes down the computers then buy the shares it was selling a few milliseconds earlier so the price goes back up, which in turn then sells it a few milliseconds after that and so on. It was weird, and as soon as it hit the news it mysteriously stopped. I wish I had the link to put up there.
That money came from Grandmas 401k and other traders.
The HFT computers do make a fortune doing this. The only way to outdo it is to have a faster supercomputer closer to the exchange that can buy more volume. Ever notice why Wall Street likes lower share prices under $75 a share and encourages companies like Google and Apple to split? So they can buy and sell millions of shares in the blink of an eye to manipulate the price. Apple it is too expensive to do that and Wall Street hates that!
Everyone loves to comment about the time the dow lost 1,000 points in a blink of an eye, where the computers were selling shares for .01 each. Hmm fat finger my ass. Someone tried to lower the price and shit went haywire when other HTF systems tried to underbid and also short the stocks so they would make money even if the price went down.

--
http://saveie6.com/
Re:One step closer to their dream... by Anonymous Coward · 2011-09-25 00:01 · Score: 0

Another poster put a link to an article about the swedish guys a little ways up from here. They were both put on a suspended sentence and fined for 'market manipulation.' Sounds like BS to me. The owner of a computer is supposed to be responsible for the actions of that computer, therefore if I can make the computer act in a predictable manner that is not intended it should not be MY fault that it does so...
Re:One step closer to their dream... by tepples · 2011-09-25 00:24 · Score: 1

There were a couple of guys in Sweden (IIRC) who figured out how a couple of the bots were trading
Either that or Norway.

Super-low latency trading Considered Bad... by Anonymous Coward · 2011-09-24 13:37 · Score: 5, Interesting

While it's very nice to have low-latency connections for lots of things, the current state of electronic trading means that even lower latency links are BAD for the world.

We're currently at a position where we give a HUGE advantage to those able to afford systems which can trade at lower latencies than others. Boiled down to it, that means the more wealth you have, the easier it is to create more wealth at the expense of those who don't have access to such super-fabulous systems and links. Basically, if I (some corp) can afford $100m in systems next to/in a trading center, I can make huge profits on arbitraging trades by even someone who has a $10m system slightly further away, and the ordinary human trader is screwed. None of that profit the mega-corp makes is economically useful activity (ask any economist) - they're simply leeches in the system, able to legally game it to their advantage (and, to everyone else' disadvantage, since trading is a zero-sum game).

From a societal standpoint, I see no benefit whatsoever at the current sub-10ms trading intervals, and the trend (which this new network link is a part of) to lower this even further for the privileged few bodes worse.

Sub-human-response-time trading is BAD for everyone except the trading floors (and their cronies, the investment banks), which live like leeches off of the financial system, sucking off profit from everyone else's trades (or, what do you think high-end arbitrage is?) It's also what leads us to those stupid market "storms" where automated systems jerk the trading around far faster than human can tell the computers are out-of-whack.

Bottom line - the tech this story promotes is great, but the primary purpose driving it isn't. We need to get a hold on the use of our technology.

-Erik

Re:Super-low latency trading Considered Bad... by Ken+Broadfoot · 2011-09-24 13:42 · Score: 1

I agree 100 percent... But what to do about it?
I would assume all this computer firepower will somehow level via market forces... BUT at the expense of little poor me and my e-trade account?
Seems to me the "knowing" of this could be used by someone who is smart... i.e. a "hacker" but again, how?

--
Bitcoin pyramid: Join here: http://www.bitcoinpyramid.com/r/1427 it's FREE!
Re:Super-low latency trading Considered Bad... by MightyYar · 2011-09-24 13:50 · Score: 1

We're currently at a position where we give a HUGE advantage to those able to afford systems which can trade at lower latencies than others.
If you are smart enough and motivated enough to put together a high-frequency trading algorithm that makes money, someone will give you a book. I don't think there is a big problem with really smart people with unused effective high-frequency trading algorithms sitting around.

--
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Re:Super-low latency trading Considered Bad... by Anonymous Coward · 2011-09-24 14:47 · Score: 0

A sales tax on each transaction might help...
Re:Super-low latency trading Considered Bad... by LordLimecat · 2011-09-24 15:46 · Score: 1

Im not sure the solution to "capitalism drives people to ridiculous measures to make penny profits" is "give the government more money". And practically speaking, it would mean that the government would have a vested interest in pushing this type of behavior.
Re:Super-low latency trading Considered Bad... by Archangel+Michael · 2011-09-24 17:23 · Score: 1

But what to do about it?
Transaction Tax. Higher taxes on income generated in this method.
Remember, TAXES are regressive and slow down economies. You tax something you slow the velocity of money. This is something the LIberals will never admit. For all its ills, Capitalism seeks efficiency of capital.
Of course, this news makes class warfare easier.

--
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Re:Super-low latency trading Considered Bad... by ponchietto · 2011-09-24 22:17 · Score: 1

Now that you point it to me: not only we have an unfair system, we also wast a lot of smart people on that.
People that could do something useful (for the whole society) instead...
Re:Super-low latency trading Considered Bad... by skubeedooo · 2011-09-25 03:13 · Score: 1

None of that profit the mega-corp makes is economically useful activity (ask any economist) - they're simply leeches in the system, able to legally game it to their advantage (and, to everyone else' disadvantage, since trading is a zero-sum game).
I broadly agree with you, but it's not true that there is no useful work being done. The arbitrage that this high speed link enables has the direct effect of bringing HK prices in line with London prices and Wall Street prices, with lower latency. It is a benefit to each regional market that you can get the best price in the world at the click of a button and not just the best price on a particular exchange. It is of special benefit to smaller exchanges as HFT arbitrageurs transfer liquidity from the large exchange to the small exchange.
Re:Super-low latency trading Considered Bad... by roman_mir · 2011-09-25 05:05 · Score: 1

The fact that they are building more capacity is a good thing. More infrastructure based on market demand, it will be used for something productive eventually, as the world solves the real problem that leads to HFT (if it ever does with thinking like this, promoted by pseudo-economists).
The Western world, including USA needs to stop expecting free money and cheap goods to be there forever for them. Production is the only thing that will remove the poison of over-leveraged vendor and Fed financed consumption from the system, but it won't be more of the same.

--
You can't handle the truth.
Re:Super-low latency trading Considered Bad... by Anonymous Coward · 2011-09-25 06:00 · Score: 0

I can agree that the current market system in trading is advantageous for the wealthy, and I can agree that that is unfair and an error.
However, blaming this on technological advances is disingenuous at best.
The fact that a problem becomes visible in a certain light, is no fault of the light. And turning off the light and pretending everything is all right again, is not a solution.
Re:Super-low latency trading Considered Bad... by AmiMoJo · 2011-09-25 06:30 · Score: 1

This is why we need a transaction tax and government controlled servers that add a random delay of 0 to 30 seconds each time. Of course no government would ever dare implement either, especially the UK. We created a monster.

--
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Re:Super-low latency trading Considered Bad... by dudeman500 · 2011-09-25 13:02 · Score: 1

since trading is a zero-sum game

Yes, but with the addition of leverage they can magically create more money. Not that that has ever caused any issues...
Re:Super-low latency trading Considered Bad... by bryan1945 · 2011-09-26 00:51 · Score: 1

Where did I read this, here or in IEEE?- A new datacenter is being put up to process transactions in NY state. It is touted to be "equal access," but in reality it's not. Those big guys pay for servers right next to the transaction servers and may have faster comm links. I forget the rest of the details, but in the end the promised equal access to normal folk is a smoke screen.
But you're right, no one in the trading industry is going to care as long as they can edge out someone by $0.01 on a million shares, 10,000 times a day. Actual humans can forecast all they want til Sunday, but if the computers say otherwise, there goes all that work into trying to figure out what is coming next. And don't dare outsmart the computers, as someone said above, you'll just get arrested.

--
Vote monkeys into Congress. They are cheaper and more trustworthy.

What I want on my wish list... by Commontwist · 2011-09-24 13:44 · Score: 1

Routers using quantum entanglement to transmit data over long distances. Whee!

Re:What I want on my wish list... by Anonymous Coward · 2011-09-24 13:50 · Score: 0

also it would solve the last mile issues...
Re:What I want on my wish list... by maxwell+demon · 2011-09-25 01:21 · Score: 1

Doesn't work. All you'll get out of it will look like random noise. It's not until you received the key via normal transmission that you can decode the message.

--
The Tao of math: The numbers you can count are not the real numbers.

dupe by Anonymous Coward · 2011-09-24 13:47 · Score: 0

isn't this a dupe?

Re:dupe by Anonymous Coward · 2011-09-24 16:27 · Score: 0

No, it's a tripe at least.

Unecessary by Anonymous Coward · 2011-09-24 13:47 · Score: 0

This is entirely unnecessary, I sit in Japan and get low enough ping to play quake 3 in London (70 lower).

It won't benefit the general population and low-latency/high-frequency trading should be illegal.

Let's lay this line through Africa shall we?

Oh I'll agree with you, 110% (no argument here) by Anonymous Coward · 2011-09-24 13:59 · Score: -1

However - What I am stating is there's MORE SPEED (and security to boot as a bonus/side effect) out there for "COMMON-MAN END USERS" and even companies, for free...

(Heck with traders, the root of ALL EVIL imo, IS THE STOCK MARKETS).

APK

P.S.=> And, I do honestly MEAN that last part... apk

Re:Oh I'll agree with you, 110% (no argument here) by M.Kristopeit84 · 2011-09-24 16:58 · Score: 1

yes creating a market for goods in the name of supply and demand is evil

your an idiot

If you're saying that... by Anonymous Coward · 2011-09-24 14:02 · Score: 0

If you're saying that people should be allowed an advantage just because they discovered an advantage, you're flat wrong.

Re:If you're saying that... by Anonymous Coward · 2011-09-24 15:04 · Score: 0

Didn't read the parent, did you.
Re:If you're saying that... by uncqual · 2011-09-24 16:44 · Score: 4, Insightful

That's what EVERY stock market investor tries to do. Every time someone buys a stock, they believe they are taking advantage of whoever is selling it. Every time someone sells a stock, they believe they are taking advantage of whoever is buying it.

In the market, every bit of market research you do, every bit of data you buy, every moment you spend educating yourself, and every dollar/minute you spend analyzing the data is to find someone to take advantage of on the other side of every trade you make.

How is arbitrage any different - it's just a different avenue?

--
Why is there an "insightful" mod and why isn't it "-1"? If I wanted insight, I wouldn't be reading /.
Re:If you're saying that... by MightyYar · 2011-09-25 01:06 · Score: 1

What in the world are you talking about? Arbitrage is all about people taking a risk in exchange for reducing price differential (where they take a profit). The risk is that in the time it takes them to buy and sell, the price at the destination will change and they will be left holding an unprofitable load of merchandise. The advantage afforded by faster information is the reduced risk.
So yeah, you need access to an expensive, high-speed network in order to compete in the arbitrage game. Not fair?
You need an oil rig and property rights to explore for oil. Life ain't fair. Most of the time, you need capital to invest in a business.

--
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.

Why law firms? by Anonymous Coward · 2011-09-24 14:05 · Score: 1

I understand why financial institutions want the lower latency but what work could a law firm be doing that could in any way benefit from 20 ms faster packets?

Re:Why law firms? by cosm · 2011-09-24 14:16 · Score: 1

I understand why financial institutions want the lower latency but what work could a law firm be doing that could in any way benefit from 20 ms faster packets?
So they can sue faster!

--
'We are trying to prove ourselves wrong as quickly as possible, because only in that way can we find progress.' RPF
Re:Why law firms? by David+Thomas · 2011-09-24 14:32 · Score: 0

20ms here and 20ms there... time is money. Lots and lots of money. David Thomas - Fashion Photographer | www.fashion-photographer.org
Re:Why law firms? by similar_name · 2011-09-24 15:18 · Score: 1

First to file patents?
Re:Why law firms? by Anonymous Coward · 2011-09-24 15:30 · Score: 0, Informative

Put your website plug in your signature rather than your post, unless you want to be modded down over and over.

Thanks, Ken Broadfoot... apk by Anonymous Coward · 2011-09-24 14:11 · Score: -1

You're a guy that obviously does/uses HOSTS files for a "Free BOOST" to online speed in websurfing especially, that works like "no tomorrow"... Good technique on YOUR end also!

Nothing like getting a FREE "turbo-charger" on your online connection, right?

APK

P.S.=> I also think the other fellow that replied missed my "P.S." section's ending, where I specifically note that "websurfing" (HTML communique via a webbrowser in other words) gains the MOST typically, for most folks online...

... apk

Why care? by Anonymous Coward · 2011-09-24 14:17 · Score: 0

Neat, some financial firm spent a lot of money making a private network used only for stock trades. This helps me or you how? It doesn't. I want news for nerds, not news for suits.

Other things gain too (programs, see inside) by Anonymous Coward · 2011-09-24 14:18 · Score: -1

Ok, 1st of all: U missed my P.S. section (where I noted @ the very end websurfing's the "general gain" & per YOUR point, for MOST FOLKS... but, other things gain too, see below...).

E.G./I.E.-> Anytime you have to "resolve" a HOST-DOMAIN name to an IP Address (& a lot more than websurfing does that)? "Hardcoded hosts-domains" in your HOSTS gain.

For instance, I use Opera - it has a tool in it called SiteCheck (that uses a security service to check against bogus/bad domains/hosts online) - it's "hardcoded" in my HOSTS file, this gains in Opera as well (& it's NOT a site I visit, for instance).

Even programs that might depend on IP communications for data would also, think about it...

For example, the PyThon system I use to populate my HOSTS file here "automagically" every 15 minutes from those sources I listed? Each source is HARDCODED too, meaning I call & reach them faster... So, see my point on this also??

APK

Re:Other things gain too (programs, see inside) by Anonymous Coward · 2011-09-24 14:32 · Score: 0

Yeah, they aren't using DNS, possibly not even TCP/IP, so your advice is completely useless to them as well.
I'm sorry, but you're talking about something that has NOTHING to do with the circumstances here. It's just you ranting. Like Loud Howard.
You're probably going to get more people to ignore you just because of that.

a good start by Anonymous Coward · 2011-09-24 14:29 · Score: -1

let me know when they start shaving pussy. Christ, nobody likes a hairy snatch any more than they like hairy legs or hairy armpits. But some nice bald pussy, damn that's good.

As do I (programmatically online for decades) by Anonymous Coward · 2011-09-24 14:39 · Score: -1

Via programming, database-wise (client-server largely since 1995 online professionally) that travels over the public internet, & yes, has to resolve out domain-hosts names + travels over various ports online... middleware too!

For example, some defaults for online communications as well as "internal/local LAN":

SQLServer = 1433/1434, MySQL = 3306, DB/2 + others too, & those are just defaults ports, yes, that could be changed, mind you + for instance do more...

E.G.-> Look @ what can be done with Oracle products here -> Oracle = http://www.red-database-security.com/whitepaper/oracle_default_ports.html

Fact is - A lot of that today gets done by SQL online via websites/webservers in communication with HTML & browsers, etc./et al but, my point's to show CUSTOM PROGRAMS HAVE USED THE PUBLIC NET FOR AGES TOO... & not just HTML & database access for they - banks even use it!).

APK

P.S.=> In fact? Heh - I have such a program I've written up here running right now, continuously, every 15 minutes written in PyThon 2.7x that hits sites, files, webpages too on a couple, to fill the very HOSTS file I speak of here... & it's not a browser, but it has the sites it actually goes to HARDCODED in my HOSTS file, which means no hosts-domain name resolution time is ever taken to talk to they that's slower than local access which is SSD zero ms practically fast here off a 4gb Gigabyte IRAM DDR-2 SSD that holds my HOSTS file + the files cached too!

(Thus - It's not SLOWER on that op either, because of HOSTS files having its sites hardcoded init, such as DNS servers are, & potentially downed or worse in THIS case, for security, DNS-poisoned/misdirected (but I use the "best in the business" on those, if not for hardcoded sites, in Norton DNS, Open DNS, Scrub IT DNS (all heavily security oriented vs. malware too))... apk

Re:As do I (programmatically online for decades) by Anonymous Coward · 2011-09-24 15:10 · Score: 0

I would advise a change of pusher, your speed is making you all tweaked ....

COOL!!! no more waiting for Zing Lee - asian Pr0n by gearloos · 2011-09-24 14:40 · Score: 2

Awesome indeed

--
"Computers are a lot like Air Conditioners" "They both work great until you start opening Windows"

wonderful by Anonymous Coward · 2011-09-24 14:46 · Score: 0

great so now I can get spam 20ms faster.

A python program I wrote is now, & industry do by Anonymous Coward · 2011-09-24 14:47 · Score: -1

It like MAD my man, look @ any default ports lists & search DB middlewares' default port #'s... See, so would any program that uses hosts-domain names in its code (& they do, not just IP addies, because companies reassign servers & ranges for security)...

Yes, I do go FASTER in it in my now locally running as we speak & continuously here nonstop 24x7 Python code for building my HOSTS file automagically for me!

Just because the hosts-domains & URLS my local Python program alone hits are hardcoded in my HOSTS file (which is on an TRUE SSD, Gigabyte IRAM 4gb DDR2 RAM unit that also has the data cached well by system diskcaches)... zero seek/access alone vs. remote DNS seek, query, return data runs...

APK

P.S.=> In my other posts, I go into how I was using Client Server database programs professionally since 1995 via their middlewares for remote online communique in fact, online over the public internet (30 or so by now "Enterprise Class" systems & their middlewares use tons of ports online that could gain the same way also via HOSTS files hardcodes of hosts-domains names for faster local resolutions etc.)... Trust me, a lot more than HTML & the web are "online" (look @ any "default ports list" & you'll see what I mean)... apk

Why does it take 176 milliseconds to do that? by grimsnaggle · 2011-09-24 14:52 · Score: 4, Interesting

Wolfram Alpha tells us that the direct path round trip by fiber would take 90 milliseconds. I'm rather impressed that it takes less than twice that to do the trip in reality, what with all of the additional routing delays and non-ideal paths that the data must take.

Re:Why does it take 176 milliseconds to do that? by Anonymous Coward · 2011-09-24 16:09 · Score: 1

Wolfram Alpha tells us that the direct path round trip by fiber would take 90 milliseconds. I'm rather impressed that it takes less than twice that to do the trip in reality, what with all of the additional routing delays and non-ideal paths that the data must take.
1) C is speed of light in vacuum, fiber is not vacuum, hence speed of light in this case is not necessarily C
2) No routing equipment can do calculations faster than C (unless you had the perfect parelel processor and OS), so you have packet, then A -> D conversion, then OSI model parsing, then protocol-specific filtering, then routing, then route-based filtering, then D -> A conversion, then send packet back out
3) Repeat step 2 for each hop
4) Last hop, repeat step 2, but add "request/response" processing there somewhere, such as ICMP ping for the most low-level test.
Re:Why does it take 176 milliseconds to do that? by Anonymous Coward · 2011-09-24 16:12 · Score: 1

repeaters, routers, non straight lines, multiple telcos, etc, etc, 176 is pretty good.
Re:Why does it take 176 milliseconds to do that? by FrootLoops · 2011-09-24 17:23 · Score: 1

1) You're the only one mentioning c (it's usually lower case), and I'm not sure why.
2) Having "perfect parelel [sic] processor and OS" are not necessary to gain a boost over a single processor. The overhead just needs to be particularly small in this case.
Re:Why does it take 176 milliseconds to do that? by Anonymous Coward · 2011-09-24 17:31 · Score: 1

Why not just VPN into the destination country. Ping times like you're there since you're virtually on that network.
Re:Why does it take 176 milliseconds to do that? by ThorGod · 2011-09-24 17:55 · Score: 1

The answer, obviously, is kuantum cantangueled routers.
(misspelling on purpose)

--
PS: I don't reply to ACs.
Re:Why does it take 176 milliseconds to do that? by FrootLoops · 2011-09-24 18:55 · Score: 1

Yes! Since quantum entanglement doesn't transfer information, maybe this type of trading would end. Maybe they'd catch on, though, and want a real method with low latency. Oh, I know! You could just distort the geometry of the earth by screwing around with the distribution of mass and energy, thereby modifying the metric tensor! Idiots--why lay cable when you can physics your way out of it?
Re:Why does it take 176 milliseconds to do that? by petermgreen · 2011-09-24 21:30 · Score: 1

C is speed of light in vacuum, fiber is not vacuum, hence speed of light in this case is not necessarily
It looks like this GP used wolfram alpha's "light in fiber" travel time so he covered that one.

--
note: i'm known as plugwash most places but i screwd up registering that here somehow in the past and now can't register
Re:Why does it take 176 milliseconds to do that? by maxwell+demon · 2011-09-25 01:02 · Score: 1

1) C is speed of light in vacuum, fiber is not vacuum, hence speed of light in this case is not necessarily C
Have you actually looked at his link? The only c he entered was part of the word "distance". And the number he wrote in his comment is (rounded) twice the number Wolfram Alpha gives for the travel time of light in fiber (light in vacuum has a travel time of only 32.2 ms, according to WA, so the round trip calculated with that would only be 64.4 ms.

2) No routing equipment can do calculations faster than C (unless you had the perfect parelel processor and OS), so you have packet, then A -> D conversion, then OSI model parsing, then protocol-specific filtering, then routing, then route-based filtering, then D -> A conversion, then send packet back out
3) Repeat step 2 for each hop
4) Last hop, repeat step 2, but add "request/response" processing there somewhere, such as ICMP ping for the most low-level test.
Obviously you didn't even read his comment, because there he states:

I'm rather impressed that it takes less than twice that to do the trip in reality, what with all of the additional routing delays and non-ideal paths that the data must take.
And BTW, "doing calculations faster than c" is a nonsensical term anyway.

--
The Tao of math: The numbers you can count are not the real numbers.
Re:Why does it take 176 milliseconds to do that? by Anonymous Coward · 2011-09-25 02:39 · Score: 0

I'm pretty sure London, Ontario isn't a global financial hub.
Re:Why does it take 176 milliseconds to do that? by Anonymous Coward · 2011-09-25 07:49 · Score: 0

twice, no. if you calculate simply using circumference, 90ms in direct longest path in circle means it will take 141.4ms in half circle. hence 176ms does include delay and interconnect routing paths.
Re:Why does it take 176 milliseconds to do that? by Anonymous Coward · 2011-09-27 00:45 · Score: 0

But the traffic has to travel from you to the VPN, so it doesn't reduce the real latency at all.

Normal Neutrinos by Roger+W+Moore · 2011-09-24 15:07 · Score: 3, Insightful

You could do this with normal neutrinos - they's travel through the planet, not around it. However your receiver will be a bit on the large side. If they had FTL neutrinos they could do far better: they could receive the signal before they send it!

Re:Normal Neutrinos by Pseudonym+Authority · 2011-09-24 16:49 · Score: 1

But could you make them [neutrinos] even faster? Imagine this: FTL neutrinos used for communication. The order message is sent, but is received by the exchange before it is sent. The ``investor'' then observes the result, and crafts the order accordingly and sends it. The perfect plan! Think of all the ``liquidity'' it could create!
Re:Normal Neutrinos by isorox · 2011-09-25 01:45 · Score: 2

You could do this with normal neutrinos - they's travel through the planet, not around it. However your receiver will be a bit on the large side. If they had FTL neutrinos they could do far better: they could receive the signal before they send it!
No, it couldn't. Even after the last neutrino story, I still haven't seen anything to support this claim.
Imagine a person situated at an equidistant point between London and Hong Kong, somewhere in orbit, 300 ms @ c away from both places. Imagine an instantaneous FTL transmitter. Imagine all 3 people have synchronised clocks based on UTC.
Times in ms after
Traditional
At 0ms Message sent from London
At 88ms message received in HKG
At 89ms reply sent back to London
At 177ms reply received from HKG
At 300ms message seen sent by observer
At 388ms message seen received in HKG by observer
At 389ms reply seen sent by observer
At 477ms reply seen received in LON by observer
HKG knows it's 88ms from London, and can therefore determine the exact time it was sent according to UTC. Likewise, London knows hongkok responded in 1ms, as they know the round trip time.
Lets now assume communication is 88 times faster than the speed of light.
At 0ms, Message sent from London
At 1ms, Message received in HKG
At 2ms, reply sent from HKG
At 3ms, message received in London
At 3.4ms message seen sent from London by observer
At 4.4ms message seen received by hkg
At 5.5ms reply seen sent from hkg
At 6.5ms reply seen received by london.
now lets say all points also have traditional light speed connections. At 88ms the message is seen to be sent from London by someone sitting in HKG, but as that message started at 0ms UTC, and it's now 88ms UTC, it can't be changed.
Now I'm sure someone will come along and say special relativity changes all that, that there's no absolute time, and a ship moving in a different inertial frame will be able to receive the message and post it back to London before 0ms UTC. I'm sure this is right, but I have never found an explanation.
My server in New York and my server in Singapore are running their clocks within a millisecond of each other. I'm confident of this, as when I check from a server that's equidistant between the two, they report their time correctly, however, if you were to observe the time, you'd think the opposite one was slow. At least until you pinged it, worked out the difference in time, and realised that they're running at the same time.
Re:Normal Neutrinos by Anonymous Coward · 2011-09-25 07:39 · Score: 0

So another word, I buy before you sell. Sounds like commodity trading to me.
Re:Normal Neutrinos by Anonymous Coward · 2011-09-26 03:45 · Score: 0

they could receive the signal before they send it!
If they were really good, they could receive the signal then quickly turn off the transmitter to save energy costs. Hey it you already got the answer why bother actually sending it.

FIRST POST by Anonymous Coward · 2011-09-24 15:19 · Score: 1

Damn!
I need to get one of those new low-latency networks!

Re:A python program I wrote is now, & industry by Anonymous Coward · 2011-09-24 15:41 · Score: 0

You go into how you're a moron, who has no idea how stupid you're coming across to everybody else.

There's a reason why you're being buried at -1. And that's because you can't be modded down to -5 as you deserve.

Nobody cares what shit you do, if you can't relate to other people in any kind of terms, but instead come across as somebody who just yells and rants about nonsense, you're not going to get anything except ignored.

Notice how I don't give a crap about you, but I figure Jesus wants me to heal even the social lepers who know not what they do.

Great things in store by bedouin · 2011-09-24 15:42 · Score: 4, Funny

I can't wait to get my spam and server bot attacks even faster than before.

Solution by Mateorabi · 2011-09-24 16:29 · Score: 1

When are they going to learn and force all trades to happen in bins. I.e. all trades arriving within each X seconds (or even some reasonable fraction) window get treated the same. The window being well-known and the same for all traders. That would put an end to most of this zero-sum gamesmanship trying to beat/trick/manipulate the other guy's trading algorithm and jump ahead of normal Joe Shmoes who can't afford to get a fat/fast pipe within uS of the trading network.

Oh, wait, the exchanges are making money by charging for this unequal access? Nevermind.

--
"You saved 1968." - Ms. Valerie Pringle to the crew of Apollo 8

Re:Solution by Billly+Gates · 2011-09-24 17:24 · Score: 1

Lets talk more about how corrupt lobbiest from these companies can buy off any laws and stop any attempt to safeguard the market.
If I were the CEO of BSO I would hire the best lobbiest money could buy as in this particular climate it is not unreasonable for lawmakers to prevent me from making money.
You can't win since these trading firms own 75% of the worlds money! You say the rich own it right? Well, where do the rich keep it? Not under their matresses but to these guys who then use the money for private jets and lobbying.
I do wonder what would happen if many people took back all their money at once? We know banks would go out of business but what about financial institutions? Do they take more than what owe gambling or paying bonuses? I do wonder

--
http://saveie6.com/
Re:Solution by Arlet · 2011-09-24 19:35 · Score: 1

There is no point. Your solution would cost more money than the margin currently collected by arbitrage specialists. Since the latter are competing amongst each other, the margins are always under pressure.
Joe Schmo just wants to buy a share of Shell, and would rather pay $61.33 on a US market, through his own broker, than to open up an account in London, quickly exchange some dollars for pounds, and buy it there for $61.31 before the price goes up. It's just too much hassle and risk, and extra fees.
Now comes in the arbitrage specialist. buys the share in London for $61.31 for the instant it is available, and re-sells that same share in New York for $61.32 milliseconds later. Joe Schmo can then take advantage of that. Instead of $61.33, he's now paying $61.32, but without all the hassle and risk of doing the trade himself.
Now, if you're going to enforce limits on what the arbitrage trader can do, Joe Schmo will have no choice, and buy the share locally for $61.33 instead.
Re:Solution by Dr_Barnowl · 2011-09-24 20:39 · Score: 1

Unless it was the wealthiest 1% of us, not very much...
Re:Solution by TheLink · 2011-09-24 22:17 · Score: 1

The following does not make it cheaper for Joe:
http://www.nytimes.com/imagepages/2009/07/24/business/0724-webBIZ-trading.ready.html
http://www.nytimes.com/2009/07/24/business/24trading.html
And it happens a lot. There were some that had very long "winning streaks" (months?), which is impossible for normal traders. It's basically two classes of traders.
The ones in the right class get their trades rolled back if "stuff happens".
The ones who aren't in the right class get prosecuted for winning: http://www.computerworlduk.com/news/security/3244186/norwegian-traders-convicted-for-outsmarting-us-stock-broker-algorithm/
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- Too many replies beneath your current threshold
Re:Solution by Arlet · 2011-09-24 22:50 · Score: 1

Of course, that's a form of front running, which is illegal. In itself it has nothing to do with high speed trading, just like your other examples of fraud and corruption. No doubt that these things are happening in the stock market, just like they are happening anywhere else. That's why these things are illegal.
Re:Solution by Anonymous Coward · 2011-09-25 00:21 · Score: 0

Joe Schmo just wants to buy a share of Shell, and would rather pay $61.33 on a US market, through his own broker, than to open up an account in London, quickly exchange some dollars for pounds, and buy it there for $61.31 before the price goes up. It's just too much hassle and risk, and extra fees.
Now comes in the arbitrage specialist. buys the share in London for $61.31 for the instant it is available, and re-sells that same share in New York for $61.32 milliseconds later. Joe Schmo can then take advantage of that. Instead of $61.33, he's now paying $61.32, but without all the hassle and risk of doing the trade himself.
Now, if you're going to enforce limits on what the arbitrage trader can do, Joe Schmo will have no choice, and buy the share locally for $61.33 instead.
So if Joe Schmo buys 100 shares of Shell, paying $6132 he would have saved $1. I fail to see the great benefit for Joe...
Re:Solution by Arlet · 2011-09-25 00:40 · Score: 1

So if Joe Schmo buys 100 shares of Shell, paying $6132 he would have saved $1. I fail to see the great benefit for Joe...
In this example, the benefit is small. Of course, if Joe is an active day trader, and trades his 100 shares 20 times a day, he could have saved $20 in total.
Also, the arbitrage trader only took $1 off the table for his services, so while the benefit is small, the fee is similarly small too.
Re:Solution by TheLink · 2011-09-25 03:32 · Score: 1

But has what they are doing been made illegal yet? http://en.wikipedia.org/wiki/Flash_trading
So far much of these HFT stuff has just been a way to either front-run or disguise it, so I'm not convinced about the benefits to the rest of society.
Proponents can talk about liquidity and creating markets till the cows come home, but when what I linked to keeps happening, there doesn't seem to be a net benefit.
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- Too many replies beneath your current threshold
Re:Solution by Anonymous Coward · 2011-09-25 03:37 · Score: 0

and re-sells that same share in New York for $61.32 milliseconds later.
Where the HFTs take advantage of it, buying it for $61.32 microseconds before anyone else discovers that it's underpriced and turns around and resells it for $61.33 to Joe Trader, while patting themselves on the back for "market making" and "creating liquidity" and claiming that without them Joe Trader would never have been able to find any shares for sale.
Re:Solution by smellotron · 2011-09-25 07:11 · Score: 1

Those two NYTimes articles refer to flash trading, which was short-lived on several exchanges (most notably the NASDAQ). This does not happen a lot; it was shut down within months.
Re:Solution by smellotron · 2011-09-25 07:18 · Score: 1

Of course, if Joe is an active day trader, and trades his 100 shares 20 times a day, he could have saved $20 in total.

In other news, I have to pay more for concrete and lumber than do any of the big-box hardware stores.
Re:Solution by WoOS · 2011-09-25 08:33 · Score: 1

Yet it shows nicely how markets and some financial institutions are willing to bend the rules for their mutual gain to the detriement of a third party: the common public.
Re:Solution by bryan1945 · 2011-09-26 00:37 · Score: 1

So, if the computers get a time advantage and can guess where the stock is going and then set prices for the slower traders, that's OK. But if humans do it and beat the computers at their own game, not OK? Gotcha.

--
Vote monkeys into Congress. They are cheaper and more trustworthy.

subject by Legion303 · 2011-09-24 17:37 · Score: 1

Having just dealt with a fuckton of spam, I'm hoping routing around large chunks of Russia will be the rule from now on.

Sting by SpaceCracker · 2011-09-24 20:02 · Score: 1

Those 20ms shaved off the previous route could make for a super-fast sting operation against those using the old system.

--
sigo ergo sum

Shaves? by Anonymous Coward · 2011-09-24 20:30 · Score: 0

So what it has a long beard or something?

poorly written last sentence... by Anonymous Coward · 2011-09-25 01:01 · Score: 0

It could be read as after 12 months of tweaking they managed to shave 20 Ms off of the time of a round trip, or that the time shaved off of a round trip is soo small it took 12 months of operation to realize a total of 20ms off of all round trips combines in that period

Ads steal from ME & my bandwidth by Anonymous Coward · 2011-09-25 01:37 · Score: 0

As I pay for my online time out of my own pocket. They do the same to others too. So, "facing you" right now on that note & this one too -> Grow up Mike. U fail vs. myself, every time.

Re:Ads steal from ME & my bandwidth by M.Kristopeit84 · 2011-09-25 07:05 · Score: 1

UR moms face is face
Re:Ads steal from ME & my bandwidth by Anonymous Coward · 2011-09-25 10:13 · Score: 0

More off topic rubbish from Mike K. because he can't fight truth.

Others disagree with your rant troll by Anonymous Coward · 2011-09-25 01:43 · Score: 0

and thanked apk for his post on hosts files http://news.slashdot.org/comments.pl?sid=2444706&cid=37505652 so you can quit your illogical off topic ad hominem attacks and blow your mod points needlessly ac troll because you can see others disagree with you in the link above.

Speaking from experience troll? by Anonymous Coward · 2011-09-25 01:45 · Score: 0

Quit projecting your faults onto others. I was going to say "Have you considered decaf?" but it seems you're into the "hard stuff". Is that off-topic b.s. the "best you've got", troll?? Apparently so. This surprises no one as your intelligence is shockingly limited.

Michael Kristopeit man of a 1,000 accounts by Anonymous Coward · 2011-09-25 02:18 · Score: 0

Tells others to log in here? Hahahahaha. Just how many 1000's of accounts have you registered on slashdot by now, Mike??

Re:Michael Kristopeit man of a 1,000 accounts by M.Kristopeit84 · 2011-09-25 07:10 · Score: 1

I can make as many accounts as i want

your and ignorant hypocrite
Re:Michael Kristopeit man of a 1,000 accounts by Anonymous Coward · 2011-09-25 11:26 · Score: 0

I shoot each down with ease. U make me look good. U wish u were me.

Nothing like a FREE TurboCharger online by Anonymous Coward · 2011-09-25 03:07 · Score: 0

That not only SPEEDS ME UP MASSIVELY but also secures me & gets ALL of what I pay for bandwidth & speedwise online.

APK

P.S.=> HOSTS files do all of the above for you, no questions asked... who's the bigger idiot here? Myself, doing the above, OR yourself, NOT doing the above?? apk

You're wrong by rsilvergun · 2011-09-25 04:43 · Score: 1

about capitalism seeking the efficiency of capital. The trouble is, you're still working on the assumption that human beings consistently make rational choices. Adam Smith made the same mistake. What's slowing the velocity of money is pure capitalism is bunching it up at the top. A rational man doesn't hoard wealth for no reason. He invests it. But our super rich are just sitting on society's wealth. Doing nothing with it (It's something like $3 trillion worth or capital sitting in corporate war chests alone). Our entire civilization is grinding to a halt while the most absurd whims of a few lucky individuals are indulged. The classic example of this is the Sheik who built a ski resort in the middle of his desert. Private jets are another good example. And even the contents of this /. article are an example of our society prioritizing the whims of the super wealthy in a pointless and irrational way. Adam Smith didn't imagine conspicuous consumption. He never saw the iPhone coming, or landfills full of last years (perfectly good) phones. There's more, of course. Globalism breaks capitalism (for all his mistakes, Marx was right about that). I could go on for ages. But the bottom line is, Capitalism is a broken toy.

--
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/

Re:You're wrong by Archangel+Michael · 2011-09-25 08:13 · Score: 1

"human beings consistently make rational choices"
All economic models make that very same mistake. The problem is that you cannot legislate rational choice, without taking away freedom. However, unlike all other economic models, Capitalism punishes the least efficient use of capital.
Take Solyent Green Scandal currently in the headlines, the company should have failed BEFORE Obama gave the loan guarantees. It was NOT a viable company before, it certainly proved it wasn't viable afterwards. The punishment of it all is that the Tax payers get left holding the bill.

--
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Re:You're wrong by rsilvergun · 2011-09-25 12:32 · Score: 1

Modern Socialism assumes human beings are irrational. Also, Capitalism as we know it doesn't punish the least efficient use of capital. Bailouts happen about every 15 to 20 years like clockwork.

As for that solar start up, it's not that much of a scandal. They didn't run off with the money, they just made an engineering mistake, namely that the price of silicone would continue to rise, so they invested heavily in alternatives. The price dropped, and all their tech was useless. Yes, it's unfortunate. Yes, mistakes were made. But they were honest mistakes. And the bill you're left holding isn't that large (compared to what it took to bail out the banks, which some pegged as high as several Trillion with a 'T'.). Plus we still got lots of new tech that might be useful in 20 years when other things advance. Look at Aerogel. It was worthless for 50 years, then someone figured out how to make it cheap, and now it's revolutionizing insulation.

Anyway, it's another case of a red herring to distract you from bigger issues. Don't be fooled.

--
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Re:You're wrong by Archangel+Michael · 2011-09-25 13:17 · Score: 1

Modern Socialism is the power of the "state" to enforce "rational" decisions on some people, but excuse other irrational decisions with state funded bailouts. Modern Socialism is just as irrational as all the others, it just pretends it is rational.
I'm not excusing the Bailouts of the banks. In fact, if you asked me, I wouldn't have bailed out the banks with anything. I wouldn't have bailed out Wall Street. I would have let them figure out how to get themselves out of the mess they go themselves into. This recession would have been over by now had that happened. As it stands now, the people who made all the god awful decisions are still running things, which is why their solutions don't work.
Soylent Green fiasco is just an example of how Chicago Politics works, give money to people so they can give it back to your election campaign. It is how pork barrel politics of both the (R) and (D) work. This time it just was part of a failed effort to prop up "Green" energy.
Lastly, You're pointing to bad behavior to excuse other bad behavior is pretty pathetic. Aerogel was known as a pretty good insulator, and I hope the guy who figured out how to make it cheap makes a fortune. But then again, he'd just become a target for Obama's "rich need to pay their fair share" rant, while bailing out another failing company who can't make it in the real world.

--
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Re:You're wrong by bryan1945 · 2011-09-26 00:58 · Score: 1

I would separate capitalism from government bailouts. Capitalism punishes those who screw up, then the government comes riding in. I call that 2 separate mechanisms. You also then contradict yourself with the solar startup- they made a bad call while the government gave them money. Your burning the candle at both ends here.

--
Vote monkeys into Congress. They are cheaper and more trustworthy.

Fast Long term investing! by Anonymous Coward · 2011-09-25 04:46 · Score: 0

Welcome, next advertisement would be "Long Term Investors" can benefit from our ultra-fast/low latency network!

Never mind trading.. by Anonymous Coward · 2011-09-25 04:53 · Score: 0

.. would be great to play street fighter with.

New UK-US cable being laid too. by Anonymous Coward · 2011-09-25 12:01 · Score: 0

http://www.telegraph.co.uk/technology/news/8753784/The-300m-cable-that-will-save-traders-milliseconds.html

It seems there is a new US-UK cable going in too.

"Of course, verifiable figures are elusive and estimates vary wildly, but it is claimed that a one millisecond advantage could be worth up to $100m (£63m) a year to the bottom line of a large hedge fund."

Is it a problem that traders are buying things they don't actually give two shits about then selling them after creaming off small amounts of money from the system less than a day later? Now they need more low latency cables to help them drive the economy into the ground milliseconds faster.

Re:A python program I wrote is now, & industry by Anonymous Coward · 2011-09-26 04:29 · Score: 0

Have you taken your medication today? Obviously not.

Going to do a "Good Will Hunting" on you by Anonymous Coward · 2011-09-27 03:22 · Score: 0

Let's explore this "chain of events" then, shall we?

1.) Investors yell @ investments brokers to get them a quarterly dividend OR higher ones

2.) They in turn, go to boards of directors (or create bad press on "poor returns from company X" etc.)

3.) Boards of directors then threaten corporate mgt. to yield higher returns (telling them "you make this happen, or YOU are 'gone-with-the-dawn'").

4.) Mgt. then turns to the EASIEST SINGLE THING THERE IS TO CONTROL, costs-wise: Payrolls (start shaving jobs, or shall I put it the "PC way" - downsizing begins).

5.) The more jobs that get shaved off, the less folks you have with disposable income (monies beyond rent/mortgage, food, utilities (basics needed for survival))

6.) YOU HAVE WHAT YOU HAVE TODAY - global economic recession

* ALL THE WHILE THE RICH GET RICHER, THE MIDDLECLASS ERODES AWAY, & THE MASS OF "POOR" GROWS LARGER... & largely due to THIS VERY PROCESS/CHAIN-OF-EVENTS happening!

APK

P.S.=> This? This is "economic 101" @ a macro (and eventually micro) level... due to GREED, pal!

... apk

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