3 ms·

> This exchange works on a 5-second quanta. All orders arriving within a quanta are treated equally. How is that unfair at all? It's unfair to the trader who p

> This exchange works on a 5-second quanta. All orders arriving within a quanta are treated equally. How is that unfair at all? It's unfair to the trader who put his order in first just as it'd be unfair to walk up to a sales desk and cut in front of people who there before you. All this does is slow down trading, it doesn't make it any more fair and now you can play the latency game for putting your orders in at the last second while allowing more time to analyse the data. 5 seconds is a long time to a computer. That such systems exist is beside the point, they are less fair than simply allowing the fastest trader to trade first.

eru 11y ago
You have a weird notion of fairness. Why reward investment in low latency above all other investment? In any case, quantising to eg 1s, allowing arbitrary sub-penny bids, and fulfilling by prize and using time as a tiebreaker would be `most fair' in some sense: The counterparty gets the best price. And people are only able to `cut in line' if they make a better price. (I don't think the fairness of waiting in line is a fundamental thing. It's just one way for humans to allocate scarce resources, and it's not very economically efficient---it just works well with human psyche and social norms.)
- gnaritas 11y ago
  > You have a weird notion of fairness. Why reward investment in low latency above all other investment? I didn't make that claim, best price should be ahead of place in line. But place in line is the next most fair thing. > In any case, quantising to eg 1s, allowing arbitrary sub-penny bids, and fulfilling by prize and using time as a tiebreaker would be `most fair' in some sense: Remove quantising to 1s and I agree. Quantising makes it in no way more fair and removes the ability to use time as a tiebreaker. If time is the tie breaker, you don't need to quantisize as it adds nothing. > (I don't think the fairness of waiting in line is a fundamental thing. It's just one way for humans to allocate scarce resources, and it's not very economically efficient---it just works well with human psyche and social norms.) It works well with the human psyche and social norms precisely because it fits our innate ideas of fairness, and thus fairness is a fundamental thing. It's so fundamental in fact that it's evolved into us as experiments with monkeys and fairness show it to be innate.

eru 11y ago

You have a weird notion of fairness. Why reward investment in low latency above all other investment? In any case, quantising to eg 1s, allowing arbitrary sub-penny bids, and fulfilling by prize and using time as a tiebreaker would be `most fair' in some sense: The counterparty gets the best price. And people are only able to `cut in line' if they make a better price. (I don't think the fairness of waiting in line is a fundamental thing. It's just one way for humans to allocate scarce resources, and it's not very economically efficient---it just works well with human psyche and social norms.)

gnaritas 11y ago
> You have a weird notion of fairness. Why reward investment in low latency above all other investment? I didn't make that claim, best price should be ahead of place in line. But place in line is the next most fair thing. > In any case, quantising to eg 1s, allowing arbitrary sub-penny bids, and fulfilling by prize and using time as a tiebreaker would be `most fair' in some sense: Remove quantising to 1s and I agree. Quantising makes it in no way more fair and removes the ability to use time as a tiebreaker. If time is the tie breaker, you don't need to quantisize as it adds nothing. > (I don't think the fairness of waiting in line is a fundamental thing. It's just one way for humans to allocate scarce resources, and it's not very economically efficient---it just works well with human psyche and social norms.) It works well with the human psyche and social norms precisely because it fits our innate ideas of fairness, and thus fairness is a fundamental thing. It's so fundamental in fact that it's evolved into us as experiments with monkeys and fairness show it to be innate.