4 ms·

Except that HFT firms don't call themselves HFT any more, they re-branded to ultra-low latency trading. And FPGAs are the norm now, not the exception. Sure, J

by posnet 6y ago

Except that HFT firms don't call themselves HFT any more, they re-branded to ultra-low latency trading. And FPGAs are the norm now, not the exception. Sure, Java still has its place, but implying that it is anywhere in the hot loop of a contemporary ULL system is wrong at best and disingenuous at worst. I mean just read the abstracts from this years STAC conference. https://www.stacresearch.com/spring2020 https://www.stacresearch.com/spring2020

jariel 6y ago
It's an entire industry devoted to wasting enormous energy, resources and intellectual capacity. There are simply no material external gains from HFT etc, it's completely zero-sum other than maybe a 'job creation program'. The site ridiculously talks about 'levelling the playing field' by extending HFT opportunities to other players, which is rich, considering the playing field could be 'levelled immediately' by some really basic regulation and a few smart queuing algorithms for placing orders.
- stzup7 6y ago
  I don't think that's quite right. It's the same way Formula 1 racing contributes to regular automotive industry. Technological innovations could be adopted by more mainstream industries in a few years. For instance SolarFlare NICs used to be almost exclusively used by HFT players and can now be found in most CDNs or latency sensitive cloud providers.
  - zarkov99 6y ago
    The F1 comparison is not bad, but its not great either. F1's tech innovations are much more publicly visible (HFT shops are extremely secretive) and F1 has the added benefit of providing entertainment value to millions.
- posnet 6y ago
  Better or worse than Ad tech based companies? Most traders I've met have been fairly honest about contributing nothing to society, or that the world would probably be a better place is large segments of the finance industry disappeared tomorrow. I can't say the same for the majority of developers from Facebook or Google I've met.
  - jariel 6y ago
    ??? I run ads and campaigns for my company and they are an absolutely essential form of communication. ... as almost everyone running and actual business knows. Yes - it can be very inefficient - but it's not inherently wasteful. You're making the wrong comparison - the 'Digital Ad Industry' could be compared to 'Digital Banking Industry' perhaps - i.e. useful overall but deficiencies exist. HFT is one of the ares in which there are no reasonable externalities. Better/faster tech for CDNs etc. can be developed without the HFT industry.
    - secondcoming 6y ago
      What sort of targeting do you use for your campaigns, and how privacy-violating are those targetings?
      - jariel 6y ago
        If you have to ask the question I would encourage you to take $50, open a FB ad account, same for Google, and run some ads to drive some traffic to your blog or whatever. Running an ad campaign, or having to 'get the word out' for something possibly meaningful can be an enlightening and transformative experience for so many people who live adjacent to, but otherwise 'totally outside' the ostensibly opaque world of marketing. It's one of the most stupidly represented issues in pop culture, like 'reefer madness' memes form the 1960s' where 'smoking weed will make you gay!'. Well - just 'smoke weed' once and you realize it's frankly just not that big of a deal. Ads are ancient, normal, universal. The industry has serious efficiency problems, we're starting to face privacy issues (which are overstated but nevertheless legit), and I don't like some mediums (I for one, think we should dump most billboards) - but the nature of the industry is not wrong or evil, it's actually beneifical. 'Good ads' are a win for everyone. HFT is only a win for those directly involved and it's zero sum.
        jimbob21 6y ago
        >but the nature of the industry is not wrong or evil, it's actually beneifical. Can you prove how? Thats what the previous poster was asking. >'Good ads' are a win for everyone. Again, how? I don't like ads. I think they're annoying. They're not good for me. I think you're drinking the koolaid.
- zarkov99 6y ago
  That is not un an entirely unfair characterization. However in my mind HFT practicioners are model citizens when compared to so many of the bright young minds working in the worlds largest tech companies. HFT is a neutral force in the world, while Ad driven tech is causing harm at a scale that is hard to overstate. History will judge the companies profiting from manipulating the worst in us in a much harsher light than they will HFT.
  - otabdeveloper4 6y ago
    Complaining about advertising is like complaining about money. Business absolutely cannot exist without advertising. The need must be filled one way or another. The same cannot be said about HFT and stock markets in general.
    - zarkov99 6y ago
      Its not the need for advertising. Its the unreasonable effectivness and devastating side-effects of the attention sequestration techniques developed in the last 10 years. Its not only that years of our of lives are being directly stollen by vapid bullshit, its that the effects of this manipulation extend well beyond the actual time spent engaging with it, with absolutely horrific consequences to our mental health, our coesion as a people and ultimately our physical safety. In a generation, if not earlier, the ad bussiness will be looked upon in a worst light than the tabaco industry. And this will be entirely appropriate.
      - otabdeveloper4 6y ago
        Again, business cannot exist without advertising. Even money and finance is negotiable - business can survive on barter alone, even though the overhead would be monstrous. But advertising is not negotiable, it must exist in one way or another if the economy exists. If you want to go down this road, argue about the "how", not the "what". The idea of banning advertising outright is too silly for words.
- literallycancer 6y ago
  It helps with price discovery just like human traders do. Is there something inherently better about droves of people shouting into telephones?
dcolkitt 6y ago
The importance of FPGAs is generally oversold. They definitely have their place, but the problem is due to the complexity you can only evaluate very simple triggers and/or must sacrifice a ton of agility where strategy development is measured in years instead of weeks. The biggest manifestation of this is that FPGAs really struggle with sizing. Say there's a given market event that produces a very obvious opportunity, but it's not so obvious how big that opportunity is. Archetypical case is when the price changes, and there's a new level formed on the book. It's almost certainly the case that adding an epsilon of liquidity at the first position of the queue is profitable. What's harder to determine is where the breakeven point is. Should you add 1 lot? 100 lots? 10,000 lots? That's a lot more complex because you generally have to be sensitive to the typical sizes in that particular market and that particular time, as well as how strong the level formation event was. E.g. was it in response to something that looks like a very big order, or just some random liquidity depletion. What happens is that the FPGAs know they should quote an epsilon, but can't really confidently quote anything bigger than that. So if the right answer is a thousand lots, the FPGA will quickly capture first queue position with something like a hundred lots, then the software-based players with take the rest of the 900 shares for themselves. What you see with FPGAs is a segment that makes very consistent, very good money relative to the volume that it executes. But fails to capture the sizable majority of the market share.

by posnet 6y ago

jariel 6y ago

It's an entire industry devoted to wasting enormous energy, resources and intellectual capacity. There are simply no material external gains from HFT etc, it's completely zero-sum other than maybe a 'job creation program'. The site ridiculously talks about 'levelling the playing field' by extending HFT opportunities to other players, which is rich, considering the playing field could be 'levelled immediately' by some really basic regulation and a few smart queuing algorithms for placing orders.

stzup7 6y ago
I don't think that's quite right. It's the same way Formula 1 racing contributes to regular automotive industry. Technological innovations could be adopted by more mainstream industries in a few years. For instance SolarFlare NICs used to be almost exclusively used by HFT players and can now be found in most CDNs or latency sensitive cloud providers.
- zarkov99 6y ago
  The F1 comparison is not bad, but its not great either. F1's tech innovations are much more publicly visible (HFT shops are extremely secretive) and F1 has the added benefit of providing entertainment value to millions.
posnet 6y ago
Better or worse than Ad tech based companies? Most traders I've met have been fairly honest about contributing nothing to society, or that the world would probably be a better place is large segments of the finance industry disappeared tomorrow. I can't say the same for the majority of developers from Facebook or Google I've met.
- jariel 6y ago
  ??? I run ads and campaigns for my company and they are an absolutely essential form of communication. ... as almost everyone running and actual business knows. Yes - it can be very inefficient - but it's not inherently wasteful. You're making the wrong comparison - the 'Digital Ad Industry' could be compared to 'Digital Banking Industry' perhaps - i.e. useful overall but deficiencies exist. HFT is one of the ares in which there are no reasonable externalities. Better/faster tech for CDNs etc. can be developed without the HFT industry.
  - secondcoming 6y ago
    What sort of targeting do you use for your campaigns, and how privacy-violating are those targetings?
    - jariel 6y ago
      If you have to ask the question I would encourage you to take $50, open a FB ad account, same for Google, and run some ads to drive some traffic to your blog or whatever. Running an ad campaign, or having to 'get the word out' for something possibly meaningful can be an enlightening and transformative experience for so many people who live adjacent to, but otherwise 'totally outside' the ostensibly opaque world of marketing. It's one of the most stupidly represented issues in pop culture, like 'reefer madness' memes form the 1960s' where 'smoking weed will make you gay!'. Well - just 'smoke weed' once and you realize it's frankly just not that big of a deal. Ads are ancient, normal, universal. The industry has serious efficiency problems, we're starting to face privacy issues (which are overstated but nevertheless legit), and I don't like some mediums (I for one, think we should dump most billboards) - but the nature of the industry is not wrong or evil, it's actually beneifical. 'Good ads' are a win for everyone. HFT is only a win for those directly involved and it's zero sum.
      - jimbob21 6y ago
        >but the nature of the industry is not wrong or evil, it's actually beneifical. Can you prove how? Thats what the previous poster was asking. >'Good ads' are a win for everyone. Again, how? I don't like ads. I think they're annoying. They're not good for me. I think you're drinking the koolaid.
zarkov99 6y ago
That is not un an entirely unfair characterization. However in my mind HFT practicioners are model citizens when compared to so many of the bright young minds working in the worlds largest tech companies. HFT is a neutral force in the world, while Ad driven tech is causing harm at a scale that is hard to overstate. History will judge the companies profiting from manipulating the worst in us in a much harsher light than they will HFT.
- otabdeveloper4 6y ago
  Complaining about advertising is like complaining about money. Business absolutely cannot exist without advertising. The need must be filled one way or another. The same cannot be said about HFT and stock markets in general.
  - zarkov99 6y ago
    Its not the need for advertising. Its the unreasonable effectivness and devastating side-effects of the attention sequestration techniques developed in the last 10 years. Its not only that years of our of lives are being directly stollen by vapid bullshit, its that the effects of this manipulation extend well beyond the actual time spent engaging with it, with absolutely horrific consequences to our mental health, our coesion as a people and ultimately our physical safety. In a generation, if not earlier, the ad bussiness will be looked upon in a worst light than the tabaco industry. And this will be entirely appropriate.
    - otabdeveloper4 6y ago
      Again, business cannot exist without advertising. Even money and finance is negotiable - business can survive on barter alone, even though the overhead would be monstrous. But advertising is not negotiable, it must exist in one way or another if the economy exists. If you want to go down this road, argue about the "how", not the "what". The idea of banning advertising outright is too silly for words.
literallycancer 6y ago
It helps with price discovery just like human traders do. Is there something inherently better about droves of people shouting into telephones?

dcolkitt 6y ago

The importance of FPGAs is generally oversold. They definitely have their place, but the problem is due to the complexity you can only evaluate very simple triggers and/or must sacrifice a ton of agility where strategy development is measured in years instead of weeks. The biggest manifestation of this is that FPGAs really struggle with sizing. Say there's a given market event that produces a very obvious opportunity, but it's not so obvious how big that opportunity is. Archetypical case is when the price changes, and there's a new level formed on the book. It's almost certainly the case that adding an epsilon of liquidity at the first position of the queue is profitable. What's harder to determine is where the breakeven point is. Should you add 1 lot? 100 lots? 10,000 lots? That's a lot more complex because you generally have to be sensitive to the typical sizes in that particular market and that particular time, as well as how strong the level formation event was. E.g. was it in response to something that looks like a very big order, or just some random liquidity depletion. What happens is that the FPGAs know they should quote an epsilon, but can't really confidently quote anything bigger than that. So if the right answer is a thousand lots, the FPGA will quickly capture first queue position with something like a hundred lots, then the software-based players with take the rest of the 900 shares for themselves. What you see with FPGAs is a segment that makes very consistent, very good money relative to the volume that it executes. But fails to capture the sizable majority of the market share.