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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.'"
You could be used to develop more efficient hardware for everyone to use, or fix medical conditions, rather than posting on slashdot.
Do you even lift?
These aren't the 'roids you're looking for.
The big loser is the trading clearinghouse/broker. Bid/ask spreads are about 1% of what they used to be.
The other big losers are speculators (as opposed to investors, look up the difference).
I see no problem with this except when the HFtraders are able to say: 'Our bad, back out all those losing trades for us'. That's just fucked.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
At least porn is of arguable value. HFT brings absolutely nothing of value to the table. It doesn't help the traded companies, it doesn't help the market, it doesn't help any country economies. In fact, all it does is give the same hedge fund bozos who trashed the US and EU's economies another way to scarf income without adding anything.
Markets need to have some sanity. Either only allow trades each 15 seconds or tack a very small surcharge per transaction which wouldn't affect normal transactions, but penalize HFT enough to not make it worth the bother.
Apparently they make life possible because they move capital where it is needs to be, and deserve the medal of honor for what they graciously give the rest of us. http://finance.yahoo.com/blogs/daily-ticker/99-owe-debt-gratitude-1-harry-binswanger-153327379.html
I agree with you, but go further.
HFT brings absolutely nothing of value to the table. It doesn't help the traded companies, it doesn't help the market, it doesn't help any country economies. In fact, all it does is give the same hedge fund bozos who trashed the US and EU's economies another way to scarf income without adding anything.
HFT isn't merely neutral adding no value; the income they "scarf" is income the rest of the stake holders lose. (To the extent that one can lose something one never got, at least.)
Either only allow trades each 15 seconds
I propose 10 minutes or even longer, and even that's more than fast enough. A company's fundamental value doesn't change 6 times an hour.
10 minutes lets news hit, lets people think and consider what they value the stock at, and even people not day trading for a living can react and put in a trade order without being 100 million trades "too late".
or tack a very small surcharge per transaction which wouldn't affect normal transactions, but penalize HFT enough to not make it worth the bother.
Not just every transaction -- every ORDER. HFT spams millions of orders to probe, guide, bait, etc, most of them never close and are cancelled; within milliseconds of being placed.
Those need to be 'taxed' as well.
Finally eliminate "dark pools". All trades MUST go through regulated markets. There should be no dark pools of unregulated trade.
HFT provides liquidity, and liquidity is of the utmost importance to traders.
Liquidity? And efficiency?You actually believe that bullshit? It's not about liquidity, efficiency, market making etc. It's all about transferring money from other people to them.
And that's of utmost importance: http://www.zerohedge.com/news/2013-05-08/jp-morgan-has-zero-trading-losses-first-quarter
When you can do it with zero trading losses day after day it's almost like a tax you impose on everyone else (guess where their money comes from).
If the market is becomes more efficient as you claim why'd would these parasites be raking in big bucks? They'd be raking in smaller and smaller bucks instead. Think about that.
And they get bailouts and transaction rollbacks, trading pauses whenever they screw up big time.
When Joe Sixpack trader screws up, nobody bails him out or rolls back his transactions. And if he outsmarts an algo he risks getting a prison sentence: http://www.computerworlduk.com/news/security/3244186/norwegian-traders-convicted-for-outsmarting-us-stock-broker-algorithm/
Reality is it's about the rich and powerful continuing to transfer wealth from the less rich and less powerful.