4 ms·
Tl;dr: "If exchange clocks are imprecise--say they are only accurate to one second--and a HFT can execute many orders in a second, then the exchange could reord
by dmurray 6y ago
Tl;dr: "If exchange clocks are imprecise--say they are only accurate to one second--and a HFT can execute many orders in a second, then the exchange could reorder all the trades in the second in any way they want, without being detected by an auditor!"
This is the only sentence in the article relevant to the title. Auditors need to insist on good timekeeping to prevent exchanges from committing fraud.
HFT firms don't fundamentally care about having accurate clocks. They care about reacting first. Having good clocks is useful for second order reasons like debugging and regulatory compliance.
- andylynch 6y agoClock sync is mostly for correlating events between distributed systems (like those feeding CAT). In the exchanges themselves, the ordering of events is better defined and often just done with sequence numbers on each matching engine or order book as messages arrive and events occur.
- dmurray 6y agoExactly, the exchange can work just fine processing each message in order without worrying about absolute time. Absolute time is needed for reporting or auditing purposes.