4 ms·

Automation in trading != HFT algorithms Obviously NASDAQ and electronic trading systems are a good innovation. But firms basically doing arbitrage or exploitin

Automation in trading != HFT algorithms Obviously NASDAQ and electronic trading systems are a good innovation. But firms basically doing arbitrage or exploiting uneven network latency are not that economically productive.

kqr 2y ago
Tighter spreads and higher liquidity is not economically productive? I can see arguments both ways.
- n4r9 2y ago
  For me, it's about whether that higher liquidity is really worth using top engineering and mathematical talent.
  - eru 2y ago
    Well, that's what we have market price signal for to decide.
    - n4r9 2y ago
      Do you mean that high salaries indicate a demand in the market? Not much argument there, although it is sometimes the case that large companies hire talent purely to starve competition. But what I'm really questioning is whether those high salaries translate to value to society.
rank0 2y ago
Absurd statement. Use your big brain CS mind for a second. This is you: > Inefficient market spreads and network latency is not worth remediating.
- andrepd 2y ago
  > Inneficient market spreads Well lowering market spreads is all about increasing the returns for capital, and incenctivising overfinancialisation. It's hardly curing cancer is it? At worst it's actively harmful if you believe that the current state of turbo-financialised capitalism has its drawbacks. > Network latency Not really sure what you're talking about but surely spending billions of dollars to bring rtt latencies to 50 micros or whatever is not really a great use of money and top engineering talent. Again, it's playing an arbitrage game but not really delivering any value.
  - rank0 2y ago
    We just have fundamentally different values. People like you are closeted dictators. I want liquidity, low spreads, price discovery. You seem to forget that “not delivering any value” is just like y’know according to you…
    - andrepd 2y ago
      Thanks for not addressing any of my concrete points and instead just calling me "a dictator". Lunatic EDIT: The funny part is even the exchanges and hft firms agree with me see PLP/speed bumps on exchanges like Eurex lol
      - rank0 2y ago
        lol I said "closeted dictator" for the record. But alrighty why don't we start over and see if we can both argue in good faith. I can certainly be a dick on the internet sometimes. I honestly can't tell what your concrete points are. I come from the position that economies are naturally occurring phenomena which cannot be centrally planned or controlled. If people can find ways to profit off market inefficiencies, they should! The HFT/Quant firms make their arbitrage money (value for them) and all market participants in return see: (non-exhaustive list) 1. Better price discovery 2. Tighter spreads 3. Higher liquidity Which is value for everyone else. If your bar is that "all smart people should be working on curing cancer or andrepd-approved endevours" then almost nobody in the economy is providing value. Is my lowly SecEng job at $MEGACORP good enough? What about my buddy who writes firmware for toothbruhes? Are professional starcraft players wasting their talents? > EDIT: The funny part is even the exchanges and hft firms agree with me see PLP/speed bumps on exchanges like Eurex lol This debate has been going on for ages, and it's silly to pretend that it's been settled and everyone agrees with you.
eru 2y ago
And Jane Street isn't a classic HFT either. Speed isn't their differentiating factor (or at least wasn't in the past).

kqr 2y ago

Tighter spreads and higher liquidity is not economically productive? I can see arguments both ways.

n4r9 2y ago
For me, it's about whether that higher liquidity is really worth using top engineering and mathematical talent.
- eru 2y ago
  Well, that's what we have market price signal for to decide.
  - n4r9 2y ago
    Do you mean that high salaries indicate a demand in the market? Not much argument there, although it is sometimes the case that large companies hire talent purely to starve competition. But what I'm really questioning is whether those high salaries translate to value to society.

rank0 2y ago

Absurd statement. Use your big brain CS mind for a second. This is you: > Inefficient market spreads and network latency is not worth remediating.

andrepd 2y ago
> Inneficient market spreads Well lowering market spreads is all about increasing the returns for capital, and incenctivising overfinancialisation. It's hardly curing cancer is it? At worst it's actively harmful if you believe that the current state of turbo-financialised capitalism has its drawbacks. > Network latency Not really sure what you're talking about but surely spending billions of dollars to bring rtt latencies to 50 micros or whatever is not really a great use of money and top engineering talent. Again, it's playing an arbitrage game but not really delivering any value.
- rank0 2y ago
  We just have fundamentally different values. People like you are closeted dictators. I want liquidity, low spreads, price discovery. You seem to forget that “not delivering any value” is just like y’know according to you…
  - andrepd 2y ago
    Thanks for not addressing any of my concrete points and instead just calling me "a dictator". Lunatic EDIT: The funny part is even the exchanges and hft firms agree with me see PLP/speed bumps on exchanges like Eurex lol
    - rank0 2y ago
      lol I said "closeted dictator" for the record. But alrighty why don't we start over and see if we can both argue in good faith. I can certainly be a dick on the internet sometimes. I honestly can't tell what your concrete points are. I come from the position that economies are naturally occurring phenomena which cannot be centrally planned or controlled. If people can find ways to profit off market inefficiencies, they should! The HFT/Quant firms make their arbitrage money (value for them) and all market participants in return see: (non-exhaustive list) 1. Better price discovery 2. Tighter spreads 3. Higher liquidity Which is value for everyone else. If your bar is that "all smart people should be working on curing cancer or andrepd-approved endevours" then almost nobody in the economy is providing value. Is my lowly SecEng job at $MEGACORP good enough? What about my buddy who writes firmware for toothbruhes? Are professional starcraft players wasting their talents? > EDIT: The funny part is even the exchanges and hft firms agree with me see PLP/speed bumps on exchanges like Eurex lol This debate has been going on for ages, and it's silly to pretend that it's been settled and everyone agrees with you.

eru 2y ago

And Jane Street isn't a classic HFT either. Speed isn't their differentiating factor (or at least wasn't in the past).