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Very well said, never thought about it in this way. It also nullifies a lot of propriety risk scoring models, like credit scores. I wonder what research is done
by joewee 8y ago
Very well said, never thought about it in this way. It also nullifies a lot of propriety risk scoring models, like credit scores. I wonder what research is done around this for automated trading systems? I see an “attacker” that creates models who’s only purpose is to force another financial institution to make unprofitable trades based on reverse engineering the other traders trading modes. Eventually, if not already happening, trading becomes machines attacking other machines.
- tzahola 8y ago>Eventually, if not already happening, trading becomes machines attacking other machines. Welcome to high frequency trading. You’re a bit late to the party though (around 15 years).
- robertk 8y agoI believe you are wrong, if I am to believe my trader friend to whom I showed this thread and answered: “Trivially true in the 'of course does behaviour of others matter' sense and in the 'could my actions influence others'. Not necessarily operational though. Fine line from there to 'spoofing' (== placing trades solely with intent of engaging others to trade at price level) -- with is VERY EXPLICITLY not allowed and for which you can get fined and go to jail. Recall the case of that poor SOB out of London who was made a poster boy for the flash crash?” It seems there is regulation against this.