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Google and Nasdaq Pursuing Nano-Second Precision In Network Time Protocol (nytimes.com)
"Computer scientists at Stanford University and Google have created technology that can track time down to 100 billionths of a second," reports The New York Times. "It could be just what Wall Street is looking for." Form the report: System engineers at Nasdaq, the New York-based stock exchange, recently began testing an algorithm and software that they hope can synchronize a giant network of computers with that nanosecond precision. They say they have built a prototype, and are in the process of deploying a bigger version. For an exchange like Nasdaq, such refinement is essential to accurately order the millions of stock trades that are placed on their computer systems every second. Ultimately, this is about money. With stock trading now dominated by computers that make buying and selling decisions and execute them with blazing speed, keeping that order also means protecting profits. So-called high frequency trading firms place trades in a fraction of a second, sometimes in a bet that they can move faster than bigger competitors.
Uhm, no. The right way would be to artificially add a random delay of several minutes, with a reproducible generator based on the orders' hashes and some seed known in advance, to avoid foul play. The generator would also need to be based on all previous orders, to avoid gaming the system if the seed is "accidentally" leaked. Details are more complex but it's all well-researched stuff.
That would fix the high frequency trading abuse, which is nothing but pure theft, skimming a fraction from every bona-fide transaction.
Just one of so many simple solutions... if only the high frequency traders wouldn't collude with the rule makers...
The creatures outside looked from Alt-Right to Antifa; but already it was impossible to say which was which.
High frequency trading is entirely about subverting any remaining myth of the market or even less so-called "investing".
What absolutely needs to happen is a flat transaction tax on any and all transactions, obliterate this entire train wreck of a financial vehicle from the entire economic equation. Simply out of basic fairness, why do I get charged 10% sales tax when buying a candy bar but not if it's a share of Apple?
A simple 1% tax on transactions would overnight return the stock market to a system for investment rather than clever hacks to milk the real economy. If you don't think your stock is going to grow at least by 1%, you simply shouldn't buy it. An extremely modest 1% transaction tax would instill that sanity into the basic fabric of the marketplace.
My
hft is hurting real economy
add a 99.99% tax on profit made on less than 1 s
a 95% tax for less than one minute
a 80% tax for an hour
a 50% tax for 4 hour
a 25% tax for 1 day
a 10% tax for 1 week
a 2% tax for 1 month
a 0.1% tax for 1 year
0.01 for over one year
So, in order to facilitate micro-trades, we're going to allow them to trade in terms of less than a second... which is disturbing all by itself when you think that even very fast internet destinations in the U.S. have latency on the order or 100ms or so. Even very slight congestion means that the financial exchanges have to simply trust the timestamps issued by the traders to get the prices and volume correct and cannot depend on the receive sequence.
There's no room for malicious action there at all, and as we all know, the U.S. has absolutely no outside actors interested in manipulating events inside the country for their own ends.
So ultimately, we're going to depend on some sort of time service run by Google and Nasdaq to validate those signatures. The problem there is that both those organizations have and will be aggressively targeted by bad apples the world over. TFA is a little light on the technical aspects of how, exactly, Google and/or Nasdaq is going to ensure that there's no forgery of timestamps. That service goes down... and Google and Nasdaq do have network problems from time to time... and suddenly all transactions are suspect? Heaven forfend that whatever algorithm used to synchronize and sign the transactions down to the nanosecond level is ever cracked. There's going to be a huge economic impetus for even very powerful countries to work on this. Imagine Chinese supercomputers manipulating American stock exchanges for their own benefit. I don't think that's too far fetched.
And we're not just depending on Google or Nasdaq, but on everyone who takes part in issuing and signing these timestamps. Wow, that's a huge amount of attack surface.
The next Slashdot story will be ready soon, but subscribers can beat the rush and slashdot the links early!
Plebs think they're joining the cool HFT club by coming up with a nanosecond standard while the dark pools got a trailer out back in the datacenter keeping track of the attoseconds.
But it would be such a shame, and a blow to the Working Man, if High Frequency Traders can't operate! Think of all the bots that would be put out of work, you insensitive clod!
How is the Riemann zeta function like Trump rallies? Both have an endless number of trivial zeros.
It is good Google gave up with the "Do not do evil" mantra, because helping the High Frequency Trading crowd is definitively bad for almost everyone.
TSN Ethernet can already pull this off in most cases. IEEE 802.1... I've personally seen it do around 100ns sync or better depending on network configuration.
Your GPS device requires time precision finer than 100ns in order to give accurate readings of your location. Just read the time out of that. (Hint: radio waves travel ~100 feet in 100 ns.)
The market itself is a racket where some people can pull shares out of the crack of their butts and then fail to deliver real shares back when they lose their short bet. Read up on Regulation SHO which didn't do anything to fix this government-approved scam.
IBM Z sysplex (multiple mainframes distributed) already run synchronized at the ns level. Also, CPU HW support is implemented to allow to commit instruccions only at certain time/delay (ns granularity)
The New York Time article is mostly about how Nasdaq is eager to make more money.
For the technically minded, refer to the paper about the introduced Huygens protocol for network time synchronization precise to the nanosecond.
Femto-second market-destroying transactions are where it's at.
now even faster!
The minimum time quantum on Microsoft Windows with modern hardware is about 330 nanoseconds, about 3 ticks per microsecond, which is still pretty coarse.
"Ultimately, this is about making money out of thin air."
FTFY
take glass steagall. For 50 years it did a decent job of preventing the kinds of economic crashes we had in 2008. After 50 years without a major economic crash people came to the conclusion that since we hadn't had a blow up the regulations could go. Seriously, people think because bad things that regulations were passed don't happen anymore we don't need the regulations...
I hate Ronald Reagan with a passion. He and his ilk (Karl Rove & the like) rolled back 100 years of hard fought workers rights in a few decades and turned the working class against the very notion of organizing for their own benefit. They turned "Union" into a dirty word and convinced folks to scrap the whole system because of a few bad apples and some Mafia interference. They were masters at it too. I'm singling him out because he was the spokesman for that crap. Mr "Government's the problem, not the solution". But crap like this is part of a broader trend to weaken the power structures that created and allow the continued existence of a middle class.
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there's a class war on in America. The best kind of war is one where the other side isn't fighting.
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The irony is that while this improves NTP, "modern linux" uses "systemd-timesync" instead which kinda sorta knows how to get the time of day from one server with undefined tolerances, throwing away decades of work by intelligent people that went into making NTP what it is now.
Who cares, right. What did those nerds know about clocks and time anyway.
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I hope your weenie falls off.
Just add a time tax in which you must pay (1/X)% to sell the stock where X is the number of seconds since last buying the stock. This penalizes short-term purchases while long-term investments go unaffected. The stock market has shifted far from it's original purpose and should be fixed.
Anons need not reply. Questions end with a question mark.
The first thing needed to make regulation work is to find a way to disallow those being regulated from bribing the regulators. Otherwise, you get Glass-Steagall removed and infinite copyright enacted. And only for this reason High Frequency Fraud still exists.
The creatures outside looked from Alt-Right to Antifa; but already it was impossible to say which was which.
The system is openly corrupt, they do not even try to hide it, yet people seem to not really care.
This will enable them to "out high frequency trade" other "high frequency traders" not able to process at their speed.
Instituting a required 1 day post processing of all orders in the order they were received would go a long way towards mitigating market volatility caused by this. This will only drive inflation up as those with the fastest systems can out game other systems, leaving the losing systems looking for way to recoup their losses... usually upon the backs of the standard hard working commoner classes.
A greater divide in wealth will continue to trend upward and the wall street casino will adjust it's odds increasingly in favor of the house. They will talk to the common man about long term holdings, diversification, and 401k's, while sneaking off to their "high frequency trading" backrooms shortly after to make money off of these transactions occurring.
In some systems I want millisecond, in others I want microsecond precision, but for the desktop I'm fine with 500ms and no time jumps. Timesyncd is the best tool for this cases.
Are you kidding me? Woohoo, yet another reason to hate systemd.
Il n'y a pas de Planet B.
0.1 ns is already achievable using a GPS receiver and JPL's corrections to GPS: http://www.gdgps.net/ It requires a subscription where corrections are sent out over the internet via UDP packets at 1Hz rate. The need for corrections is because the ephemeris information sent in the GPS signals is only accurate to about 20ns due to slow GPS satellite rubidium drifts and orbital drag factors (full list of correction factors on their website).
Amazing lack of detail in the article, but how is this different from or better than Eidson's PTP protocols, also known as IEEE 1588? That lets you synchronize and time stamp packets on a network, at least on the LAN - extended LAN.
timesync is the best tool because it barely does what you will settle for. Okay. Or are you trying to say that a more precise time will somehow harm your desktops?
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When the morning bell finishes ringing the players day is done.
My ism, it's full of beliefs.
ntp is designed to minimize time jumps, skewing by small amounts more often. timesyncd is just a reinvention of old timed, including unfounded beliefs in predictable network latency, and, yes, clock jumps where none are needed.
because people voted folks into office who repealed it. If congress was stacked with Liz Warrens and Bernie Sanders instead of Paul Ryans and Mitch McConnells it never would have been repealed.
Getting rid of the bribes wouldn't hurt, but if the end result is still guys like Ryan, McConnell and other "Small Government" right wingers running the show then nothing changes. We need to convince people government can work so they'll stop voting people into office whose goal is to break government.
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I agree that high frequency trading appears to be an emergent parasitic strategy that should be stopped by some sort of rule set modification. Maybe someone could change my mind. Maybe there's an economic value to it, but I don't really buy the whole "we make the market more efficient" explanation. Maybe someone with an economics background could clarify.
I sympathize with your complaints about deregulation, but you're terribly misinformed.
Glass–Steagall was repealed in 1999 by the Gramm–Leach–Bliley Act, an overwhelmingly bipartisan piece of legislation. The Senate voted 90-8, the House 362-57, and finally signed by Bill Clinton. The Reagan bashing is utterly anachronistic, as he was out of office a decade prior. Karl Rove was a minor player in Texas politics, and wouldn't become a national figure until Dubya was elected in 2000. You need to be looking at the banks, they're the ones calling the shots.
Government's the problem, not the solution". But crap like this is part of a broader trend
But government is the problem.
Not State Government, federal government. It's literally system-wide and needs to keep a light touch since it can affect, influence, damage, and destroy anything it gets near. It needs to be a coordination entity between states. It needs to make sure "everyone's telling the truth" as best they can, and the truth may change over time as we learn new things. (Eggs are good / bad / good / bad / I forgot what I said last.) And then again opinions may differ between states.
Wisconsin may want men to marry cheese. Iowa may have a thing for women and vacuum cleaners, North Carolina may mandate vaccines while South Carolina prohibits them. WHATEVER. The groups of people in each state decide what they think should be law. Vote and set the law, or vote and change the law. Hate it, can't change it, and can't stand it? Move to one of 49 other places. And surprise, there might not be a place anywhere that exactly meats 100% of your vegan responsibilities. (Or even 1%, in which case seems likely you're soon to be an ex-pat.) You have to choose what's important and ignore the rest, other people will choose similarity and you'll have overall agreement, but not homogeneous idea duplication. We all have to live and get along with each other; nobody is a literal daemon that needs to be shot on sight or chased out of restaurants. (Otherwise we go back to "let's tar and feather them" and "run them out of town on a rail". *I* wasn't around for any of that, and you weren't either. Do you REALLY want to revert back to mob rule? I sure don't.
We enforce the laws on the books so everyone knows what's expected of them. If they're bad, wrong, or stupid, change them; but you enforce what's there at the time and don't do retro-active until you invent a time-machine. That's one of the problems with the current Federal Government: they can easily make laws affecting everybody, and they can also make conflicting laws without regard to previous ones, and then "maybe we'll enforce it, or maybe we won't." That's BS. Enforce ALL of them, AS WRITTEN. And update as necessary. And regarding the Feds, try not to have them involved at all, never mind laws overriding everything. (Oh My -- States Ruling Themselves? What is this World Coming To?)
And the Feds do minor things like overall protection of all of us -- that's the military, and external border control help if a state wants assistance. Same with roads -- Nebraska drives on the right side of the road, Rhode Island drives over the left. Fine, but BZZZZ, not on federal interstate roads that transit both states. Elsewhere, have at it; Northbound drives in the middle of the road, Southbound drives on the edges. You're stupid for not going along with the majority, but whatever.
And for things that exceed a state, they begrudgingly control things like interstate banks. Within Texas, if you want state bank deposits backed by steers? Go for it. But for Bank of America, crossing state lines, suddenly one state is pitted against another, and it takes the feds to break the stalemate.
They turned "Union" into a dirty word
Ohhh, I do believe they had some help there from the unions themselves. It's not always Power Of The People against The Man. I suspect at times it's Power Corrupts, whether at Large, Medium, Small, or Gigantic scale. The only thing "Too Big to Fail" is the Fed Gov itself, everything else (GM anyone?) should let die a natural death. Banks as well AS LONG AS the depositors are protected. Investors? They get the short end of the stick, that's why they're investing for profits. Sometimes there aren't any, and sometimes they're negative.
Re:
If the universe is someone's simulation -- does that mean the stars are just stuck pixels?
So much of the news these days talks about inequality in societal wealth, collapse of traditional businesses and industries, and other gloomy socioeconomic news, even when "the economy" is running well. The idea of fast trading and its variations, day trading, high frequency trading, and their ilk are a vector of these inequities. Letting trades happen at nanosecond scale just amplifies the problems that make money for those who already have it while raising the barrier to ordinary citizens and investors.
It used to be that investment was there to build the economy. If a company needed capital to develop a product or service, or bring it to market, then Wall Street and the exchanges were there so you could sell shares to an investor. It was considered wise to invest for the long term. Leaving your invested capital in a successful company could net you large rewards in 20 or 30 years, at a time in life when you could retire or make good use of your accumulated wealth. The idea of the primary market to capitalize a company is of course still very important.
But recent decades have seen ever increasing activity of the secondary aftermarket, where those who bought shares direct from the company are now trading back and forth with others. It is a game of musical chairs in which the idea is to be left holding the most greenbacks when the music stops. Unlike primary issues of equity to raise money for a company and build wealth in the long run, the aftermarket trades are a zero sum game in which for every winner there is an equal loser, none of which adds wealth to the company. Sure, if a trading frenzy jacks up the stock price, the company can benefit by selling more shares, but all too often these days, companies might not benefit so much as does their CEO and other principle shareholders, nor do higher stock prices translate into better business, profits, and dividends.
The problem is that the markets have a whole lot of psychology and man-in-the-middle and other social stresses on them that make stock price and even whole market movements irrational as measured against mathematical analysis of the facts. Trading and the financial markets are complex non-linear systems, and they can be likened in many ways to electrical circuits with capacitances, reactances, attenuators, amplifiers, propagation delays, and the like, all of which could settle an itchy twitchy circuit or market or else make them go crazy at the wrong times. Adding high frequency switching to a given subcircuit could have very chaotic and disruptive effects (chaos in both the dynamical and the figurative sense). I can foresee where this could result in trades that occur out of order or prematurely with respect to various incoming data, a race condition, which could spark human panic, buy ups, sell offs, and lead to a major market catastrophe. Every time there has been a market crash or collapse, e.g. in the U.S. in 1837, 1929, & 2008, there were any number of pundits swearing they knew better and that it could not happen.
There is nothing inherently good or beneficial to society by having nanosecond trading. Some people will make money, some will lose, the parent companies will derive no benefit, and the inherent value of the company and the products they make and people they serve might end up in jeopardy if a meltdown occurs.
I have a solution to the problem of speedy self serving trading in lieu of long term value investments. A hyperbolic tax scale. No, not exaggerated "hyperbole", but a mathematical inverse function. Short term capital gains tax = some fudge factor divided by time that the stock is held. Tax = k / time. Do some homework to pick a benchmark for k. (If you want to have true zero tax in someone's lifetime, or some floor of a minimum obligatory tax, then you can add offsets, Tax = k / time + minimum, but ignore that for the moment). Suppose that an investor who holds a stock for 2 years pays a 40% capital gains tax, or else maybe 20% at 5 years or something to that effect. Once you pe
At SLAC and other large accelerator complexes we need to synchronize systems as the few-picosecond level (sub-picosecond for specialized systems), over a few kilometers. For us we have a near speed-of-light beam to allow a clear definition of synchronization (but the synchronization is maintained without the beam), and are now also installing a system that measures the round-trip physical time delay. The latter of course depends critically on the exact cable routing.
For large scale (global) networks, its not obvious exactly what the goal is. Is the goal to ignore all cable delays? If so, I wonder how a computer's local time is certified to be synchronized at the nanosecond level - maybe some sort of GPS based synchronization where the computers position and GPS signal phase is used to determine time? (but what about the nanoseconds of GPS antenna cable?).
It seems like defining what is wanted may be trickier than doing the engineering.
I made this
https://crowlogic.github.io
Almost died and left 4 dead by my previous employer. Would love to get paid to work on this stuff again
I don't think HFT is the real problem, its only a nuisance that they can withdraw orders they never intended to be filled. The cancel confirm should be delayed until after the order queue is cleared to prevent it. But this is minor stock market detail, and some stock markets do this to prevent HFT traders placing and removing lots of fake orders.
France taxes stock trades 0.2%. It does not help, because banks, Goldman sachs etc. create derivatives based on French equities and trade those derivatives offshore outside the French taxation zone to avoid it.
You can't buy a french stock without paying the tax, you can buy a tracking derivative abroad for that stock tax free.
The real train wreck is in the index tracker funds. These *dwarf* the value of the equities they are supposed to be indexing. They buy derivatives of those index funds which frees up money to invest elsewhere. e.g. a warrant, an option, and more esoteric derivatives.
Obviously the companies and banks who offer these derivatives cannot possibly pay out *all* they offer. There simply isn't enough stocks to do so.
Regulation, aka 'stress tests' limit the percentage of risk. Everything works on percentages, it all assumes there isn't a crash or destablising event bigger than they predicted. When there is, all hell breaks loose, and suddenly bail outs using currency dilution become politically acceptable.
(I'm quite dodgy on US markets right now, Trump's bumbling trade wars are the stress, his deregulation removes the stress test and freed up capital for a mini bubble, and his isolationism means its less likely the currency swaps from 2007 would be available for a bailout. He seems to be lining up another 2007.)
When some trigger thing happens, they blame the trigger not the underlying cause. 2007 was way overinflated due to out of control debt. Yet 'subprime' mortgage defaults get the blame, because they triggered the inevitable collapse.
HFT could well be blamed next time, but it's hardly the underlying problem.
take glass steagall. For 50 years it did a decent job of preventing the kinds of economic crashes we had in 2008
FWIW the counter-argument to this is that Canada never had Glass-Steagall, and they didn't suffer nearly the economic crash that America did.
As long as I'm here I would like to add that I don't care if banks crash, as long as they don't take me with them.
"First they came for the slanderers and i said nothing."
timesync is the best tool because it barely does what you will settle for. Okay. Or are you trying to say that a more precise time will somehow harm your desktops?
Do you demand that your car is capable of half the speed of light? (Although you will never drive it at more than 70 mph because you are a law-abiding citizen).
I am sure that there are many other solipsists out there.
Wow, if you had a car capable of half the speed of light, would you complain? I'm not a track driver, but I would definitely take that to the track.
"First they came for the slanderers and i said nothing."
There is already a standard with nanosecond precision (or better).
It's called 1588 PTP.
https://en.wikipedia.org/wiki/...
Government cannot make man richer, but it can make him poorer. - Ludwig von Mises
What's wrong with using an existing standard for this, like IEEE1588 (PTP) https://en.wikipedia.org/wiki/Precision_Time_Protocol? It's proven and has been in use for years, where ever time accurate network synchronisation is needed like in data acquisition in planes and even CERN (https://en.wikipedia.org/wiki/The_White_Rabbit_Project)
There is a cost. Someone from systemd would need to interac with someone from ntpd or chrony, in a somewhat civil manner. Imagine the hardship!
To the parent of the post I'm replying to, do you enjoy the delicious irony of someone with a username of grep -v '.*' * ignoring everything you said and basically proving the point for you with ignorant strong opinion? Gonna be a long week, its only Monday...
That's the entire point of Glass-Stegal. To prevent the banks that invest in whatever crazy risks they want to take from being the same as the banks that care if they fail. Like literally make them different entities.
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But it would be such a shame, and a blow to the Working Man, if High Frequency Traders can't operate!
You're trying to be funny but your humour by your lack of understanding about what HFT does. HFT is the reason your common man can buy and sell stocks at fixed set points accurately with low transaction costs.
Yes it would be a blow. I certainly don't want it to go back to the way it was years back where every buy and sell operation had to take into account the fees and potential delay costs associated with the transaction.
Signed: A Working Man ... well a procrastinating from Working Man.
I don't need any more reasons to hate systemd, it's the real world example of code written by the "FASCISTIC IDIOT" from GNU's "Know your sysadmin."
I call for tar and feathers for Lennart. And severe spanking before and/or after.
That paper is mostly old stuff but with new names.
But still a good view into this area.
https://www.usenix.org/system/files/conference/nsdi18/nsdi18-geng.pdf
Old stuff
Figure 4 is a time tunnel, but should not have straight walls.
Figure 8 is lucky packet non-linear filtering.
New stuff
Figure 2 Looking at the errors on a network level and forcing loops to zero.
Wrong stuff
If you change the thermal environment on a cheap oscillator (open the door on the computer) you can see 1ppm/sec.
Still great work to get that accuracy with standard NICs.
Hopefullly will publish more than the description?
You're accidentally correct in that PCs generally don't keep their RTC in sync (they have better time bases after booting up); other than that what a trainwreck of a comment. Yikes.
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I hate Ronald Reagan with a passion.
Maybe your hate is misdirected?
In November 1999, President Bill Clinton publicly declared "the Glass–Steagall law is no longer appropriate"
https://en.wikipedia.org/wiki/Glass_steagall
The other side of the argument is that systemd (the umbrella) is not just for desktop. So which one is it? systemd is desktop-only or not just for desktop? Make up your mind!
Ineffective.
"First they came for the slanderers and i said nothing."
I'm not sure what you mean. It seems to have worked pretty well when it was in place. Any examples of it being ineffective?
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You seem to have completely ignored my post here. But let's look deeper at your comment:
Let's assume that there were a Glass-Stegal act with teeth, that didn't have loopholes, so that non-investment banks would only be able to buy top grade investments. One problem is that the subprime loans were being repackaged and given the rating of top grade investment by the rating agencies. The rating agencies were full of liars. Beyond that, a lot of the banks (most of the ones that crashed?) like Lehman Brothers didn't take deposits (thus were considered investment banks), and still caused a crisis. At best, Glass-Stegal will just keep FDIC protected deposits from being lost, it won't prevent other banks from causing a crisis.
I really like the way Paul Volcker looked at it: "Any bank that is too big to fail is too big to exist. Any bank that takes government money needs to be sold, or broken into pieces." But it doesn't really matter now, since the federal reserve has invented ways to give money to banks without involving congressional votes.
"First they came for the slanderers and i said nothing."
I certainly don't want it to go back to the way it was years back where every buy and sell operation had to take into account the fees and potential delay costs associated with the transaction.
Why would you need to do all of that work for transactions binned by the second or minute? In that much time, the price is not going to substantially change. If you're not buying and selling millions of shares a day, a $0.02 difference in share price isn't going to change your mind or impact your finances.
If I go out and drop $1000 on stocks every couple of months, the fact that I could have gotten them $3 cheaper is pretty immaterial. I'm planning to hold them for months or years, and in that time their value is going to change by a whole lot more than $3.
The only arguments for HFT seem to be made by those engaging in HFT. And I get that - they've found a way to make money as a parasite in the system, and they'd have to do something productive if that flow gets cut off. But it's definitely parasitic, and not serving a useful function for anyone who doesn't buy and sell constantly.
Velociraptor = Distiraptor / Timeraptor
You mean, the post I responded to that started this conversation? The only thing I ignored was your point about Canada. I guess I considered a small (economically and population wise) country to be different from the US.
Oh, I'm in total agreement there.
That's not true. First, JP Morgan was owned by Chase, Solomon Smith Barney with Citibank.. Second, since 2008, most of the investment banks that were independent are now merged with banks that take deposits.
Also, that just points to the need for a more constrained definition of investment bank.
I agree. I'm not saying Glass-Stegal is perfect... I'm saying it's better than what replaced it (nothing) when it was (partially) repealed in 1999.
But while size is one metric, it seems insufficient. After all, how hard is it to create a dozen LLC subsidiaries? We need more and better regulations, sure. But keeping imperfect regulations are all we're likely to get under this President (frankly, or under his opponent from 2016)
Your ad here. Ask me how!
I would say "that's racist", but then I realized neither are races: Mexico is a religion and Islam is a nation...
In that much time, the price is not going to substantially change.
So what you're saying is that HFT is so pointless that there's no reason for it to exist in the first place? So the market has solved itself then right, and we're not actually having this discussion?
If you're not buying and selling millions of shares a day
You may not be, but the people you trade through are. The costs associated with delays in trading directly translates to risk, that risk directly translates to a bigger buy/sell spread so you can absorb the costs.
If I go out and drop $1000 on stocks every couple of months, the fact that I could have gotten them $3 cheaper is pretty immaterial.
One day I hope we get to transaction fees that are this low. If you may a transaction and then hold on to shares for years and let it be then you're hardly a backyard stock trader. There are plenty of people who are facing hundreds of dollars in transaction costs a month for their home trading schemes.
The only arguments for HFT seem to be made by those engaging in HFT
The only people you're listening to are the HFTs. There are plenty of arguments for it from stock brokers, exchanges, and economists alike, not to mention those people who actively research market stability. Thought the latter are ultimately quite split on the net benefit to society as the liquidity that HFT provides to a market disappears at a time when its stabilising effect is most needed: flash crashes. None the less aside from a few prominent bugs that have made the last few flash crashes a bit worse there has been an almost market wide benefit to HFT benefitting not only people who trade stocks directly but also those who have others do it for them ... like anyone with a pension.
2.5-25 milliseconds of fuzz is not adequate to defend against manipulation from the algorithms and the people parking adjacent data center cages. There needs to be a sufficient time penalty so as to make humans(retail investors) able to compete.
A random delay of up to 2 seconds of fuzz might level the playing field.
But, without throttling the algorithms it will always be a case of Goldman Sachs and Morgan Stanley pulling some HFT shenanigans to scalp retail investors even more. That this might increase market maker's risks is exactly the point. Why should they be without risk and retailers be without hope?
but clients get the best deal or the broker get fined and/or shut down.
Whose monitoring, auditing and enforcing this? The SEC isn't auditing Goldman's systems to verify that they aren't front running.
What is the need for nanosecond precision if not for front running? What is the point of selling looks at your book and nearby data center cages fo not for front running.
Front running is real. Front running is rampant. The exchanges and SEC would be powerless to prevent it, if they weren't already fully onboard.
Simply auctioning off the securities every 5 seconds for liquid stocks, commodities, etc. prevents this as each participant has access to an open order book and will enter their orders in 5 second batches. Less liquid securities will be auctioned off every 10 seconds, 30 seconds, 1 minute, ...
Put a small penalty for cancelling orders to prevent high frequency traders from flooding the market with large numbers of trades which will not be filled and only serve to influence the current price.
Reference on auctions: https://academic.oup.com/qje/article/130/4/1547/1916146
I agree. I'm not saying Glass-Stegal is perfect... I'm saying it's better than what replaced it (nothing)
Why? What exactly do you expect Glass-Stegal to do? There was a bubble that popped. How does the source of funding matter?
"First they came for the slanderers and i said nothing."
I love how the systemd fanboys are trying to censor this
CLI paste? paste.pr0.tips!
This is exactly the kind of ill reasoning that I expected
CLI paste? paste.pr0.tips!
Limit the damage a bubble burst puts into the system by at least creating a distinction between commercial and investment banks, and ensuring that commercial banks continue to function in a burst. That was erased in 1999. So compare the recessions of 1987 and 2008. That's what I want Glass-Stegal to do.
Your ad here. Ask me how!
1987 wasn't a recession, I think you are referring to the stock market anomaly. The stock market isn't the economy.
2008 didn't happen because of Glass-Stegal, it happened because there was a bubble in the housing market that burst. That would have happened either way.
"First they came for the slanderers and i said nothing."
Exactly my point.
The 1980's also featured a housing market bubble burst. Possibly worse than 2008.
Your ad here. Ask me how!
I don't find it convincing, for three reasons:
1) Other countries without Glass Stegal didn't react as the hypothesis would predict.
2) The investments were triple-A rated, so were considered a 'safe' investment.
3) The proposed mechanism of action (that would only come into play when the G-S loopholes were closed): removing some capital from play, wouldn't have been enough to stop the crash. People who want to invest in that stuff would just find other ways to invest in it, causing the same bubble.
And I will add a fourth non-sequitur:
4) Fuck bankers.
"First they came for the slanderers and i said nothing."
I think he was being a little intense there but VMs can time drift enough to mess with some UDP file transfer schemes and DRM bullshits from my experience so there are probably all sorts of applications that won't run right on VMs without NTP. Of course the most popular NTP application is syncing the system clock so I don't know what he's on about.
For situations that NEED precision time with capital NEED, there is the appropriately named Precision Time Protocol.
Don't worry a derivative for the "crash" will be created. And then the market will crash with regularity and those that are invested in that happening will $$$. Of course this will likely result in a bot war on the derivative and the financial markets will become useless. Oh wait they already are. Move along.
When shit hits the fan get some of these https://youtu.be/pY-GncsZ-UE
I'm literally not sure whether you're talking about the 1980's or 2008. I'm going to assume the 1980's
The bubbles were primarily US only. And I reject "other countries that don't make up 1/3 of the free market didn't react like the US" as a compelling argument. The US is so big, and so many transactions at least partially ran through the US and needed to follow US law, that it's a much more complicated question than "what country you in".
Actually, the 1980's were what gave birth to the whole junk bond thing.
The goal of G-S isn't to stop the crash. It's to prevent the crash from causing a recession. Which when the bubbles in the 80's burst did not cause a recession and in 2008 did.
Your ad here. Ask me how!
If it was travelling at half the speed of light, doppler effect could make red lights look green... oops.
I'm not repeating myself
I'm an X window user; I'm an ex-Windows user