5 ms·
What’s the minimum lag for a packet to reach around the world? Multiply x2 and add an extra 10%. Make that the minimum order placement tick duration. There w
by eecc 7y ago
What’s the minimum lag for a packet to reach around the world?
Multiply x2 and add an extra 10%.
Make that the minimum order placement tick duration.
There would be 1 single global price and no arbitrage between markets possible.
- TomMarius 7y agoNow we just need the teleport
- phildawes 7y agoWhat about order cancels - would you similarly limit those?
- Retric 7y agoYes, the ability to cancel an order now vs 1 second from now is not that meaningful. Or as the general public is concerned ‘If you’re directly placing orders on the stock market you can ware your big boy paints.’
- hoseja 7y agoHow is the packet traveling? Through undersea fiber? Through Starlink? Through the Earth by neutrinos?
- ctack 7y agoI imagine that no one with any clout is petitioning for a more equal platform.
- H8crilA 7y agoOrders are filled in the order that they arrive to the exchange (if there's more than one order at the same price). A global mis-pricing would still be subject to a race to exploit it - whoever submits first gets the fill, even if it happens in the future (in the next tick). What you're proposing is turning continuous trading into a fast series of auctions, like what happens for every ticker on every exchange at the opening. This would have the disadvantage of no clear bid/ask - how can you be sure that the parties do not withdraw their offers before the next tick? And surely you must allow for offer withdrawals.
- eecc 7y agoWhy? It’s just like a clocked bus; you leave enough time for the levels to propagate along the transmission line and settle before closing the register gates. All orders are placed at the previously known tick price and later orders will occur at the price declared on the next tick. Of course no trader should access the “ghost price” before it is announced on the tick. Propagation delays remain limited to local data centers and in any case it’s about globally known prices. Where’s the arbitrage here?