5 ms·

It's definitely a very interesting field in software engineering terms. Pity it's for such an unproductive use) end x)

latency-guy2 3y ago
It's not unproductive at all - you just don't like what it's being used for, and you should explicitly say that rather than proclaiming an industry to be unproductive. Avoid the tendency to exaggerate your feelings.
amelius 3y ago
It fits in the "our smartest people are making people click ads" category.
- hef19898 3y ago
  I'd say it beats big ad tech by miles. First, in the current financial system, HFT serves a tengible purpose, an easily quantifiable one. Well, easier than selling ads so. Also, HFT is not spying on it users to turn a buck. And if HFTs screw up, they loose their own money. If ad tech screws up, they risk screwing up democracy (Cambridge Analytica was a thing, least we forget). For me, HFT is the more honest, and less evil, way of making a buck.
  - delecti 3y ago
    Isn't HFT just being a middle man lots of times? If that understanding is correct, then I disagree that it serves any purpose. At least ads help enable new economic activity, being a middle-man just skims off the top of things that are already happening. Also, HFT has contributed to a flash crash before, so it's not free of externalities either.
    - lordnacho 3y ago
      What's wrong with middle men? People would just cut them out if all they did was skim a bit from everyone.
      - amelius 3y ago
        Eh, perhaps they set themselves up so that it becomes impossible to cut them out. If you don't know how that works, just look e.g. at TicketMaster: https://en.wikipedia.org/wiki/Ticketmaster#Criticism_and_controversies https://en.wikipedia.org/wiki/Ticketmaster#Criticism_and_con...
        lordnacho 3y ago
        But that's not an argument against all middlemen. Do you think your fishmonger has any value?
        amelius 3y ago
        Not against all middlemen. But it's a response to your argument: > People would just cut them out if all they did was skim a bit from everyone. The point is that "just cut them out" is not so simple in many cases. See TicketMaster and the fact that even artists hate them but have to deal with them.
    - growse 3y ago
      > ...being a middle-man just skims off the top of things that are already happening. Presumably you buy all your goods directly from growers / manufacturers, rather than using retailers who are simply there to skim off the top? > Also, HFT has contributed to a flash crash before, so it's not free of externalities either. You're confusing the effects of the industry with the effects of incompetent actors within that industry. Besides, the negative externalities are trivial. Institutional holders barely notice or care about flash crashes.
      - delecti 3y ago
        The point of the stock market is to be a market. And when possible I do like to buy from companies that sell their product directly. > You're confusing the effects of the industry with the effects of incompetent actors within that industry Doesn't that same point apply to Cambridge Analytica, the singular example of a negative externality from ads in the comment I replied to? Whether HFTs and/or the broader concept of middle-men are better or worse than ads, they're at least still in the same ballpark. I definitely agree with the GP comment's sentiment: > It fits in the "our smartest people are making people click ads" category.
        growse 3y ago
        > The point of the stock market is to be a market. And when possible I do like to buy from companies that sell their product directly. What if you're in the northern hemisphere and want to buy strawberries in December? Or you want a pint of milk, but your local dairy only sells it by the tanker? The point is effective middlemen help markets function even better than if it were just people with things to sell and people who wanted to buy them. They provide a valuable service, which the market also coenienhly ascribes a value to. > > You're confusing the effects of the industry with the effects of incompetent actors within that industry > Doesn't that same point apply to Cambridge Analytica, the singular example of a negative externality from ads in the comment I replied to? I think there's a difference between incompetence and malice. But broadly, yes. I don't think you can write off the ad / data broker industry because of a few bad actors. > Whether HFTs and/or the broader concept of middle-men are better or worse than ads, they're at least still in the same ballpark. I definitely agree with the GP comment's sentiment: > > It fits in the "our smartest people are making people click ads" category. The difference I see is that it's possible to externally measure and quantify the benefits / externalities of HFTs to the market participants. It's much less clear cut in ads, which is why some people feel ickier about that particular industry. But I don't buy the whole "smartest people doing useless things" argument. You can't make people work on "useful" things, and you can't discount everything that a smart person does in the ad industry as useless to humanity. It's much more complicated than that.
    - smabie 3y ago
      Middle men provide real value, that's why you buy almost all of your stuff thru them.
      - HDThoreaun 3y ago
        Not when the market is already liquid enough for my liking without them.
        smabie 3y ago
        What market are you referring to? Certainly not financial markets where market makers make up majority of volume?
      - deleted 3y ago
        [deleted]
  - amelius 3y ago
    If HFT was so great then why didn't any HFT firm produce any layman-understandable evidence of it?
    - fisf 3y ago
      Because not everything that's useful is layman-understandable.
kajaktum 3y ago
HFT provides liquidity and depth to the market tho. It does serve a purpose. How much? Not sure. Does it need to be super duper fast? Not sure. But that is natural in industries like this, because if you don't do it then someone else will.
- skippyboxedhero 3y ago
  It provides unbelievable amounts of value. Most people who complain about HFT, even those who work in the industry, say this from a position of total ignorance about what things were like before. Even ten years ago, commissions were sky-high in comparison. Twenty years ago, it wasn't possible for most investors to access markets directly at all. You had to go through several layers of intermediaries just to get market exposure (it isn't just execution costs, HFT is an enabler for other innovation like ETFs)...you paid your wealth manager, the fund manager, who paid the broker, etc. Your returns were getting cut by a significant amount. This trend is still working it's way through the industry but even versus ten years ago, you have seen massive improvements for consumers.
  - amelius 3y ago
    It just raises an enormous barrier of entry to access the market.
nradov 3y ago
In theory, HFT firms boost growth for the entire economy by reducing the liquidity premium portion of the cost of capital. But in practice it's hard to determine whether that social benefit actually outweighs the value they extract. This would be an interesting area for further economics research. For retail investors like me, HFT firms allow me to get better trade execution.

It's not unproductive at all - you just don't like what it's being used for, and you should explicitly say that rather than proclaiming an industry to be unproductive. Avoid the tendency to exaggerate your feelings.

amelius 3y ago

It fits in the "our smartest people are making people click ads" category.

hef19898 3y ago
I'd say it beats big ad tech by miles. First, in the current financial system, HFT serves a tengible purpose, an easily quantifiable one. Well, easier than selling ads so. Also, HFT is not spying on it users to turn a buck. And if HFTs screw up, they loose their own money. If ad tech screws up, they risk screwing up democracy (Cambridge Analytica was a thing, least we forget). For me, HFT is the more honest, and less evil, way of making a buck.
- delecti 3y ago
  Isn't HFT just being a middle man lots of times? If that understanding is correct, then I disagree that it serves any purpose. At least ads help enable new economic activity, being a middle-man just skims off the top of things that are already happening. Also, HFT has contributed to a flash crash before, so it's not free of externalities either.
  - lordnacho 3y ago
    What's wrong with middle men? People would just cut them out if all they did was skim a bit from everyone.
    - amelius 3y ago
      Eh, perhaps they set themselves up so that it becomes impossible to cut them out. If you don't know how that works, just look e.g. at TicketMaster: https://en.wikipedia.org/wiki/Ticketmaster#Criticism_and_controversies https://en.wikipedia.org/wiki/Ticketmaster#Criticism_and_con...
      - lordnacho 3y ago
        But that's not an argument against all middlemen. Do you think your fishmonger has any value?
        amelius 3y ago
        Not against all middlemen. But it's a response to your argument: > People would just cut them out if all they did was skim a bit from everyone. The point is that "just cut them out" is not so simple in many cases. See TicketMaster and the fact that even artists hate them but have to deal with them.
  - growse 3y ago
    > ...being a middle-man just skims off the top of things that are already happening. Presumably you buy all your goods directly from growers / manufacturers, rather than using retailers who are simply there to skim off the top? > Also, HFT has contributed to a flash crash before, so it's not free of externalities either. You're confusing the effects of the industry with the effects of incompetent actors within that industry. Besides, the negative externalities are trivial. Institutional holders barely notice or care about flash crashes.
    - delecti 3y ago
      The point of the stock market is to be a market. And when possible I do like to buy from companies that sell their product directly. > You're confusing the effects of the industry with the effects of incompetent actors within that industry Doesn't that same point apply to Cambridge Analytica, the singular example of a negative externality from ads in the comment I replied to? Whether HFTs and/or the broader concept of middle-men are better or worse than ads, they're at least still in the same ballpark. I definitely agree with the GP comment's sentiment: > It fits in the "our smartest people are making people click ads" category.
      - growse 3y ago
        > The point of the stock market is to be a market. And when possible I do like to buy from companies that sell their product directly. What if you're in the northern hemisphere and want to buy strawberries in December? Or you want a pint of milk, but your local dairy only sells it by the tanker? The point is effective middlemen help markets function even better than if it were just people with things to sell and people who wanted to buy them. They provide a valuable service, which the market also coenienhly ascribes a value to. > > You're confusing the effects of the industry with the effects of incompetent actors within that industry > Doesn't that same point apply to Cambridge Analytica, the singular example of a negative externality from ads in the comment I replied to? I think there's a difference between incompetence and malice. But broadly, yes. I don't think you can write off the ad / data broker industry because of a few bad actors. > Whether HFTs and/or the broader concept of middle-men are better or worse than ads, they're at least still in the same ballpark. I definitely agree with the GP comment's sentiment: > > It fits in the "our smartest people are making people click ads" category. The difference I see is that it's possible to externally measure and quantify the benefits / externalities of HFTs to the market participants. It's much less clear cut in ads, which is why some people feel ickier about that particular industry. But I don't buy the whole "smartest people doing useless things" argument. You can't make people work on "useful" things, and you can't discount everything that a smart person does in the ad industry as useless to humanity. It's much more complicated than that.
  - smabie 3y ago
    Middle men provide real value, that's why you buy almost all of your stuff thru them.
    - HDThoreaun 3y ago
      Not when the market is already liquid enough for my liking without them.
      - smabie 3y ago
        What market are you referring to? Certainly not financial markets where market makers make up majority of volume?
    - deleted 3y ago
      [deleted]
- amelius 3y ago
  If HFT was so great then why didn't any HFT firm produce any layman-understandable evidence of it?
  - fisf 3y ago
    Because not everything that's useful is layman-understandable.

kajaktum 3y ago

HFT provides liquidity and depth to the market tho. It does serve a purpose. How much? Not sure. Does it need to be super duper fast? Not sure. But that is natural in industries like this, because if you don't do it then someone else will.

skippyboxedhero 3y ago
It provides unbelievable amounts of value. Most people who complain about HFT, even those who work in the industry, say this from a position of total ignorance about what things were like before. Even ten years ago, commissions were sky-high in comparison. Twenty years ago, it wasn't possible for most investors to access markets directly at all. You had to go through several layers of intermediaries just to get market exposure (it isn't just execution costs, HFT is an enabler for other innovation like ETFs)...you paid your wealth manager, the fund manager, who paid the broker, etc. Your returns were getting cut by a significant amount. This trend is still working it's way through the industry but even versus ten years ago, you have seen massive improvements for consumers.
- amelius 3y ago
  It just raises an enormous barrier of entry to access the market.

nradov 3y ago

In theory, HFT firms boost growth for the entire economy by reducing the liquidity premium portion of the cost of capital. But in practice it's hard to determine whether that social benefit actually outweighs the value they extract. This would be an interesting area for further economics research. For retail investors like me, HFT firms allow me to get better trade execution.