4 ms·

why would they do that?

by jgh 8y ago

koolba 8y ago
To finally put an end to flash trading by limiting the total transaction throughput to one trade every ten minutes.
- Tesl 8y ago
  But they could implement that tomorrow if they really wanted to? Was this a joke that's gone over my head? :)
- Mtinie 8y ago
  It would be funny if it worked that way, but alas, it doesn’t.
- shanev 8y ago
  In 5 years both sharding and Plasma would be implemented on Ethereum. NASDAQ would probably run its own Plasma chain or sidechain and wouldn’t be beholden to the main chain’s throughput.
  - tomjakubowski 8y ago
    > NASDAQ would probably run its own Plasma chain If they're running a blockchain on their own, doesn't that defeat the point? > To eliminate _single points of failure, siloing and centralized control_.
- MichaelGG 8y ago
  SEC can "fix" HFT instantly by allowing more decimals. There's no good reason to only have 0.01/0.001 increments. Making it so granular forces speed over accurate pricing. Make it 8 decimals and the speed advantage goes away.
  - hendzen 8y ago
    No, it just moves the race from getting the first order at the +0.01/-0.01 band placed to getting the first order priced .00000001 better than the top placed before a liquidity-taking order comes in. There is no really easy way to "get rid of HFT", and it's unclear whether we actually want to do that. Equity trading is very cheap & efficient w/ tiny spreads on everything remotely liquid. Pretty much the only people who get hurt by HFT are big institutional investors (hedge funds, etc) that used to be able to move big blocks of stock without affecting the price as much as they now do. If anything - the pricing is better now. If you own a truckload of oranges and you hear that someone is going around frantically buying up all the oranges at every store, do you not feel like you should consider raising the price of your oranges?
    - MichaelGG 8y ago
      I'm unsure how it doesn't fix the speed advantage. Anyone can get in front by bidding a millionth cent more. You can keep doing that until the price starts mattering, right? I'm not against HFT at all. But having such granular pricing doesn't do anyone favours. More decimals would reduce spreads as well as silencing HFT critics and maybe make trading a bit more accessible without as much high end systems. But the spread reduction is valuable alone.
- __blockcipher__ 8y ago
  Haha. I love me some subtle blocksize jokes.
darawk 8y ago
To eliminate single points of failure, siloing and centralized control. Right now a small group of massive incumbent institutions collect quite significant rents in exchange for providing market access and maintaining custody of funds. This involves tons of transaction costs, slowness, brittleness, mistakes, and of course, severely restricts who by and how these markets can be accessed. Tokenizing securities can open that up, make it more transparent, safer, and less friendly to incumbent interests.
- hendzen 8y ago
  What specific transaction costs/rent collecting are you referring to? As a retail investor I can trade stocks for free on Robinhood. My orders get filled instantaneously at the current market price. On other platforms the per-trade fee is a couple bucks, regardless of transaction size. With Coinbase I pay a MUCH larger fee, that is a percentage of the transaction size rather than zero (with Robinhood) or a low fixed cost. With Coinbase I would pay a ~15 dollar fee to buy or sell $1000 dollars of BTC or ETH. As far as moving money in/out of Fiat, Robinhood/Etrade/etc also win with near instant transfers if your account is already funded. Coinbase buys and sells take days to clear. Can you provide specific real-world examples of how tokenized securities can help with "transaction costs, slowness, brittleness, mistakes" ?
  - __blockcipher__ 8y ago
    This comment makes me sad. Lots of bad info. All securities exchanges incur fees, varying based on wherher you’re eating or supplying liquidity. I forget what these are called, but companies like Interactive brokers pass those fees on. Robinhood eats the fees for you. With coinbase, you pay a 0% fee as long as you use GDAX, which is a no brainer, and place limit orders that are not immediately executable e.g. sell $.01 above the current price or buy $.01 below. I’m not the parent so I’m not gonna address the tokenization question, but my opinion is that tokenization helps the users (stockholders), but takes power away from centralized exchanges thus the NASDAQ would be kinda crazy to switch to decentralized assets
    - 8y ago

why would they do that?

by jgh 8y ago

why would they do that?

koolba 8y ago

To finally put an end to flash trading by limiting the total transaction throughput to one trade every ten minutes.

Tesl 8y ago
But they could implement that tomorrow if they really wanted to? Was this a joke that's gone over my head? :)
Mtinie 8y ago
It would be funny if it worked that way, but alas, it doesn’t.
shanev 8y ago
In 5 years both sharding and Plasma would be implemented on Ethereum. NASDAQ would probably run its own Plasma chain or sidechain and wouldn’t be beholden to the main chain’s throughput.
- tomjakubowski 8y ago
  > NASDAQ would probably run its own Plasma chain If they're running a blockchain on their own, doesn't that defeat the point? > To eliminate _single points of failure, siloing and centralized control_.
MichaelGG 8y ago
SEC can "fix" HFT instantly by allowing more decimals. There's no good reason to only have 0.01/0.001 increments. Making it so granular forces speed over accurate pricing. Make it 8 decimals and the speed advantage goes away.
- hendzen 8y ago
  No, it just moves the race from getting the first order at the +0.01/-0.01 band placed to getting the first order priced .00000001 better than the top placed before a liquidity-taking order comes in. There is no really easy way to "get rid of HFT", and it's unclear whether we actually want to do that. Equity trading is very cheap & efficient w/ tiny spreads on everything remotely liquid. Pretty much the only people who get hurt by HFT are big institutional investors (hedge funds, etc) that used to be able to move big blocks of stock without affecting the price as much as they now do. If anything - the pricing is better now. If you own a truckload of oranges and you hear that someone is going around frantically buying up all the oranges at every store, do you not feel like you should consider raising the price of your oranges?
  - MichaelGG 8y ago
    I'm unsure how it doesn't fix the speed advantage. Anyone can get in front by bidding a millionth cent more. You can keep doing that until the price starts mattering, right? I'm not against HFT at all. But having such granular pricing doesn't do anyone favours. More decimals would reduce spreads as well as silencing HFT critics and maybe make trading a bit more accessible without as much high end systems. But the spread reduction is valuable alone.
__blockcipher__ 8y ago
Haha. I love me some subtle blocksize jokes.

darawk 8y ago

To eliminate single points of failure, siloing and centralized control. Right now a small group of massive incumbent institutions collect quite significant rents in exchange for providing market access and maintaining custody of funds. This involves tons of transaction costs, slowness, brittleness, mistakes, and of course, severely restricts who by and how these markets can be accessed. Tokenizing securities can open that up, make it more transparent, safer, and less friendly to incumbent interests.

hendzen 8y ago
What specific transaction costs/rent collecting are you referring to? As a retail investor I can trade stocks for free on Robinhood. My orders get filled instantaneously at the current market price. On other platforms the per-trade fee is a couple bucks, regardless of transaction size. With Coinbase I pay a MUCH larger fee, that is a percentage of the transaction size rather than zero (with Robinhood) or a low fixed cost. With Coinbase I would pay a ~15 dollar fee to buy or sell $1000 dollars of BTC or ETH. As far as moving money in/out of Fiat, Robinhood/Etrade/etc also win with near instant transfers if your account is already funded. Coinbase buys and sells take days to clear. Can you provide specific real-world examples of how tokenized securities can help with "transaction costs, slowness, brittleness, mistakes" ?
- __blockcipher__ 8y ago
  This comment makes me sad. Lots of bad info. All securities exchanges incur fees, varying based on wherher you’re eating or supplying liquidity. I forget what these are called, but companies like Interactive brokers pass those fees on. Robinhood eats the fees for you. With coinbase, you pay a 0% fee as long as you use GDAX, which is a no brainer, and place limit orders that are not immediately executable e.g. sell $.01 above the current price or buy $.01 below. I’m not the parent so I’m not gonna address the tokenization question, but my opinion is that tokenization helps the users (stockholders), but takes power away from centralized exchanges thus the NASDAQ would be kinda crazy to switch to decentralized assets
  - 8y ago