Slashdot Mirror
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.
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.
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.
CLI paste? paste.pr0.tips!
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.
It wouldn't matter when in that quantum the order was placed, everyone would be working from the results of the last quantum.
But having a long time window and waiting till the end means you can incorporate more information. If there is a big block trade in London, and you can transmit the information quickly to NYC, you can place your order in the last microsecond of the 30 second window and screw anyone dumb enough to have placed their order earlier ... so everyone will wait. So your "time window" will do nothing to discourage HFT.
What other effects will it have? It will increase transaction costs. High Frequency Traders are not investors, they are market makers. They find a willing buyer and a willing seller, arrange the transaction, and execute the trade. They make a profit on the spread between the buy price and the sell price. The problem is that once they locate the buyer and seller, they need to buy the stock from the seller first, then turn around and sell it to the buyer, but the buyer may have cancelled they transaction, or they may have already bought the stock from someone else, in which case the HFT is stuck with the stock and may have to sell it to someone else at a loss. If transactions are granulated to 30 second intervals, instead of say, millisecond intervals, then the risk of this happening is thirty thousand times higher , and the HFTs will insist on higher spreads, resulting in lower liquidity and higher transaction costs for both buyer and seller.
Since the introduction of high frequency trading, transaction costs have fallen considerably, saving plenty of people a lot of money. The only losers are the old market makers that used to have lucrative sweetheart deals with the exchanges. Those old market makers are now bankrupt and gone. Good riddance.
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.
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