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.

Comments

It's all just enabling more bullshit

[Zenin]

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.

Re:wrong way

[ShanghaiBill]

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.

That would raise risk for market makers, increase transaction costs for small investors, and push even more big investors into off-shore dark pools.

Before proposing silly "solutions", could you please explain what problem are you trying to solve?

You need to convince voters that regulation works

[rsilvergun]

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.

Re:Life in prison is a long time in nanoseconds

[Zontar The Mindless]

Are you kidding me? Woohoo, yet another reason to hate systemd.

Re:wrong way

[phantomfive]

Before proposing silly "solutions", could you please explain what problem are you trying to solve?

I don't know what problem he is trying to solve, but the problem that annoys me is front-running: listening for an order, then quickly buying the stock first (because you have faster connections), immediately turning around and selling it to the person who was going to buy it in the first place, but at a higher price. This does absolutely nothing to help the market as far as I can tell.