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Why people haven't deployed something like this (http://www.millenniumit.com/capital_market_solutions/ http://www.millenniumit.com/capital_market_solutions/) as
by leot 14y ago
Why people haven't deployed something like this (http://www.millenniumit.com/capital_market_solutions/ http://www.millenniumit.com/capital_market_solutions/) as part of a bank in the Cayman Islands eludes me.
Yes, the upfront cost is large. But it seems likely that you'll own the market basically overnight.
- sachingulaya 14y agoIMHO, the markets aren't ready yet. 1) The available APIs sucks. MtGox's trading engine tops out at 37TPS. Thirty seven. Price swings trigger situations where you can have minutes of lag where price discovery is impossible. These are, unfortunately, the times where arbitrage is most profitable if you have reliable market data. 2) Gox's socket API magically drops cancelled orders here and there so the order book is unreliable. 3) The markets lack liquidity and, although there are profitable strategies that can be exploited, they are only going to make you a few thousand a day at most. This isn't going to attract much attention. 4) There is no historical data to backtest strategies...not that it would be helpful while bitcoin behaves like a penny stock. HFT for bitcoin is pointing a bazooka at a cockroach. Price lags between exchanges correct on the order of minutes--not milliseconds. MtGox is a toy for now. So I was(maybe still am) building a toy trading bot to match ;D.
- jzwinck 14y agoThe London Stock Exchange spent some US$30 million to buy that, and ended up with quite a few very significant production problems: http://www.computing.co.uk/ctg/analysis/2032112/lse-stricken-millennium-bugs http://www.computing.co.uk/ctg/analysis/2032112/lse-stricken....
- leot 14y agoOne hopes that many such problems would have been resolved by now. Certainly the problems can't have been worse than 60 minute+ trading lags.