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Undiscovered Country of HFT: FPGA JIT Ethernet Packet Assembly
michaelmalak writes "In a technique that reminds me of the just-in-time torpedo engineering of Star Trek VI: The Undiscovered Country, a company called Argon Design has "developed a high performance trading system" that puts an FPGA — and FPGA-based trading algorithms — right in the Ethernet switch. And it isn't just to cut down on switch/computer latency — they actually start assembling and sending out the start of an Ethernet packet simultaneously with receiving and decoding incoming price quotation Ethernet packets, and decide on the fly what to put in the outgoing buy/sell Ethernet packet. They call these techniques 'inline parsing' and 'pre-emption.'"
Neutrinos exist.
Why only 15 seconds? Why not 24 hours? What reason, other than gaming the system, could there ever be to hold a stock for less than 24 hours? I don't understand why this wasn't made illegal 30 years ago... Well, I do - the people making the laws are the people profiting from them - but the reason is not a good one.
Exactly. Say there's a classified site that you can only load once per minute due to bandwidth restrictions (being a human). I post "Bicycle for sale $500" and another guy posts "wanted: bicycle, $600 or less."
But there are some guys who can reload the page faster because they've bought a very expensive premium service from the classified site. Not a very fair site is it?
One of them sees the two ads, buys my bicycle, and posts "Bicycle for sale $599" before any non-premium members can see what's going on.
Who did that help except for the guy with the premium service? I didn't make more. The guy who wanted a bike just got screwed out of $99.
"When information is power, privacy is freedom" - Jah-Wren Ryel
HFT algos aren't making bets on equity price movements. They're usually using sophisticated methods of finding and exploiting arbitrage opportunities.