6 ms·

High-Speed Trading Isn't About Efficiency—It's About Cheating

148 points by gz5 13y ago

zacinbusiness 13y ago
I've never really understood the stock market. Is this basically how it works? A person can make or sell things, but that person is limited in the scope of their business by their available capital. Thus, they can increase their capital by either securing a business loan or by making their company "public." Securing a business loan is risky, because they will still have to pay back the loan regardless of whether or not their company makes any money. Going public carries additional risks, but at least they aren't on the hook if the business fails - and there's an added benefit of the potential for enormous gains in capital which can further increase their business potential. So, the person "goes public" which is extremely complex and time consuming, but let's say they are able to convince 100 people that they should each buy a "share" of the company. This means that the more money that the company earns in profit, that a little bit of that profit is "owned" by each person who owns a share. Right? (I am legitimately asking here, because as I said I really don't understand much of the way it works.) So, now we have stock exchanges. These are places that people can buy, sell, or trade stocks of different companies for cash or other assets? I own one share of Company A and that share is worth $51 right now. Later in the day, however, we see that company A has earned a little bit more money than we thought it was going to, and so now my stock is worth $53. And I originally purchased the stock for $47, so I can potentially sell that stock for a $6 profit, or I can hang on to it and hope that it goes a little higher. However, humans can only act so quickly, and day-traders and short-sellers act on stocks in the span of minutes or hours. So if I purchase 10,000 shares of Company B at 10:00 for $5 each, and then sell those same 10,000 shares back at 10:04 for $5.02 each, then I have made a small profit. And large firms do this hundreds of times each day, with dozens of companies, and likely tens of thousands of stocks. Right? So, HFT does the same thing. Except, instead of making a purchase-sell decision every few minutes, they do it every few microseconds. And the returns per transaction are something like... .0000034 per share (this is a guess), but over tens of thousands of shares, and millions of times a day. Right? This, however, is where my understanding breaks down completely. HFT obviously benefits a company that can wield it. If my hedge fund can hire the programmers, run the servers, and buy the licenses to the data then I stand to make huge profits for a minimal investment when my HFT "algobots (lol)" do their thing. But I don't understand how this benefits the rest of the market? I'm guessing that most of these HFT bots are not being run by small-time investors, and in fact that the trades made by small-time investors will be heavily influenced by the HFT trades that are made in-between the time the guy using E-Trades can point on the "Buy!" button and the time he can click on it. And as a consumer who does not participate in the stock market (in that I do not have an investment portfolio, I realize that the stock market influences me regardless of whether or not I put money into it), I really don't get how HFT helps me. What it looks like to me, is that players who have the most money, and who have the best technology will have a benefit over players who lack those resources. And so while there's no evidence (that I'm aware of) that these HFT-using companies are committing any malfeasance, it looks like the natural side-effect is that the market becomes more one-sided. I would liken this to a professional athlete using steroids (let's pretend that steroids aren't illegal). Steroid use may stem from the player simply wanting to maximize their ability to use their body, and so they enhance their muscles and work hard to be able to control them. This player isn't actively trying to cheat, he is simply using technology to overcome a natural hurdle (let's also assume that this same player has, through hard work, literally pushed their body to the limit of what it can naturally achieve). However, a similar player who has also pushed their body to the limit is either unable or unwilling to use steroids, and thus they are unable to compete against the other due to the slight technical advantage. Is this a true analogy?
- shabble 13y ago
  I'm not entirely clear on the exact process either, but I think your initial summary has it mostly correct. There are additional complexities in Share Dividends (you receive a fraction of the companies profits proportional to your number of shares owned, which incentivises not-selling, to a point) The basic issue that HFT (and markets in general) seek to solve is liquidity - the ability to buy & sell when you want, rather than having to wait while a deal is worked out. Consider the differences in process when buying/selling a commodity such as gold, vs buying a particular house. There's a good overview of the mechanics & benefits of [HF]T in the 'A High Frequency Trader's Apology'[0] series, written by HN member yummyfajitas. [0] http://www.chrisstucchio.com/blog/2012/hft_apology.html http://www.chrisstucchio.com/blog/2012/hft_apology.html
  - Lazare 13y ago
    That's an excellent series of posts. Thanks for the link!
- Lazare 13y ago
  Kinda. A few points to help clarify things: All funds that go into the business will either be debt or equity. Debt gets a guaranteed rate of return, and needs to be paid back. It gets first claim if you go under, but gets no "bonus" if you do well. Equity is an ownership stake; last in line if you go under, but with a claim on all future profits if you do well. The most obvious type of equity stake is your own, but you might say to a friend hey, go halves with me on buying a new lathe, and I'll split the profits from the furniture I make 50/50. That's another example of an equity stake, as old as the hills. All a stock market is, is your friend saying "look, I've got the note saying I have a right to 50% of the profits of Zac's furniture business, but I'm broke right now; anyone wanna give me $50 for it?". And because in practice this sort of thing is fraught with risk, this is incredibly regulated, but that's all a stock market is; people trading the right to some uncertain future profits. (Well...kinda. There's also the question of control. Some shares give you a say in how a company is run; some don't. That's rarely a factor though.) Notionally, incidentally, the value of a company's stock is the discounted sum of all future cash flows. If you owe 100% of Amazon, obviously you have the right to 100% of all future profit they make. If you owe 0.0001% of Amazon, you have the right to 0.0001% of all future profit they make. That's the core driver of stock prices; the market's ever-changing estimation of a companies future. As for HFT...no, you won't make huge profits. The entire HFT industry, globally, makes chicken feed, but they make for VERY entertaining news stories, so you read about them a ton. Anyhow, as to "why HFT is good", the answer is basically that we all benefit when markets work better, and one way markets can work better is if they are deep and liquid. In simple terms, that means that if you want to buy or sell something, there's always someone there offering to take the other side of the trade for more-or-less the market rate. Conversely, housing is a very shallow, very illiquid market. If you want to sell your $400k house, it might takes weeks or months, and you may find yourself happily paying significant fees to the broker, and maybe even selling it at a discount, just to get the damn thing to sell. If you want to sell your share of Apple stock, it will take microseconds, and you'll get very close to the market rate (ie, low commission/low spread). And while HFT doesn't have a huge impact, to the extent it has an impact, it is to make the market deeper, more liquid, and more efficient. HFT benefits the HFT traders, but it also, and this is really, really, important to grasp benefits every person who trades with the HFT traders. The losers are the "low frequency traders" who would have bought your Apple share from you a little slower and for a little less money, but lost out. But again, this effect is minimal. The drive for HFT is the race for pennies in an increasingly efficient and competitive market. Small time investors, honestly, aren't the victims here. (Unless they're doing the day-trading, "I can pick stocks because I read a book on trend analysis" thing, in which case...they're absolutely screwed, but no more so now than before HFT. The stock market is not a game.) And no, I wouldn't say the market is becoming "more one-sided"; that presupposes there being two sides. There aren't; there are seven billion sides. HFT does not profit at the expense of pension funds or entrepreneurs; it profits at the expense of everyone else who wanted to profit from them. And I think the sports analogy is especially inapt. We want markets to work as efficiently as possible. We want sports to provide a spectacle. These things are not similar.
moron4hire 13y ago
HFT is more likely about front-loading their own customers' orders than it is about reacting efficiently to price changes.
gaius 13y ago
Lost me at That brings us to high-frequency trading (HFT) hedge funds. These funds use computer algorithms—a.k.a.: algobots No-one says this. I'm not involved in HFT myself but I know a bunch of people who are, there is a jargon word, but it's not that.
- cake 13y ago
  A quick Googling reveals that some people do use algobot to talk about HFT software. I guess it's a dumbed down idea to sell to the masses.
- crntaylor 13y ago
  You tend to hear high frequency traders refer to the code that makes pricing and trading decisions as a system, or signal, or model, or (very occasionally) algo (all refer to slightly different things) but I have never heard them refer to the code that makes trading decisions as a bot or algobot. Source: I used to work in high frequency trading.
- CoolGuySteve 13y ago
  I'm in the industry, nobody calls it an "algobot". It sounds ridiculous and doesn't really express much. I'm guessing someone was winding up the reporter, as from reading the article it seems obvious the person is in over their head. Reminds me of the (possibly apocryphal) story of how a bunch of teenagers made fun of a 20/20 reporter by describing a made up word "mosh pit", and then it caught on.
yummyfajitas 13y ago
I don't get it. The article first criticizes HFT for making markets rather than speculating, incorrectly asserting that it's somehow a tax on traders (hint: don't cross the spread if you don't want to pay the "tax"). Then it reveals that HFT does speculate - they pay people to do market research and trade on that basis, which is somehow also evil. Damned if they do, damned if they don't I guess. The authors reasoning in going from HFT engaging in speculation to a financial transaction tax is unclear. He wants to prevent speculation and information gathering? Or prevent people from speculating quickly?
- ronaldx 13y ago
  The author's point is clear - that HFT adds no value to society ("socially worthless"). I don't believe that he wants to prevent anything, but he suggests that trades should be taxed to create some value to society from this. He is suggesting their value (at the moment) is exclusively to the benefit of making rich people - who can pay for access early information and technology - richer.
  - gaius 13y ago
    It's not clear what journalism of this quality does to create some value for society. Just sayin'.
    - williamcotton 13y ago
      Well, fortunately for you his journal isn't a quasi-governmental entity. Unfortunately for your argument, our stock markets are. They wouldn't be remotely viable if they weren't supported and regulated by government. In exchange for the tax payer funded assistance is the social benefit of keeping the whole thing running. Or would you like to test the viability of a market with no government oversight and no government enforcement of contracts?
      - yummyfajitas 13y ago
        How would you build a newspaper or magazine without government enforcement of contracts and copyright? If you want to claim an HFT shop is "quasi-governmental" because contracts are enforced, then basically every enterprise in the world is "quasi-governmental" (except for the black market).
bbosh 13y ago
The primary function of the stock market is to exchange ownership (shares) in a company. It's odd that we seem to have forgotten that. What value is there in a computer owning a stock for 10 milliseconds?
- drunkpotato 13y ago
  I've read elsewhere on here that the value of high-frequency trading is that it reduces transaction costs and increases liquidity in the market. I.e. it makes it easier for the humans to buy and sell at the prices they wish to buy and sell at. Assuming that's true, the question then becomes what are the costs and externalities of HFT and, in balance, are we willing to make those trade-offs? I haven't seen anything addressing those issues yet, but I haven't been looking either. HFT experts want to weigh in, pro/con/otherwise?
  - yscale 13y ago
    HFTs tend to add liquidity when it's least valuable, and they tend to consume liquidity when it's most vital. For example, an analysis of the 2010 flash crash shows it was worsened by HFTs fleeing their positions once volatility increased, which is the exact time that liquidity and market-making are most valuable. If there is any social benefit to HFT it is utterly trivial.
  - yummyfajitas 13y ago
    Since most of the people commenting here don't seem to even understand HFT, I'll just leave this here (a tutorial I wrote a while back): http://www.chrisstucchio.com/blog/2012/hft_apology.html http://www.chrisstucchio.com/blog/2012/hft_apology.html http://www.chrisstucchio.com/blog/2012/hft_apology2.html http://www.chrisstucchio.com/blog/2012/hft_apology2.html http://www.chrisstucchio.com/blog/2012/hft_whats_broken.html http://www.chrisstucchio.com/blog/2012/hft_whats_broken.html
    - rtpg 13y ago
      you should probably link part 2 from the end of part 1, if not it's not obvious that you did write part 2.
tikhonj 13y ago
A few immediate thoughts: Transaction volume is ultimately not the important metric--revenue is. And, following [1], it seems that the total revenue for HFT was probably around $2Billion in 2013--for a whole industry, that's not very much! Measuring transaction volume is akin to comparing shipping between Amazon and Walmart ignoring the fact that Amazon ships directly to consumers while Walmart mostly ships to large Walmart stores. "...increasing liquidity is the last refuge of bullshitters" is not an argument--it's an assertion. That was not really supported. Liquidity is a good thing; the article claims that HFT does not help much because most of the actual benefits happened before its advance. Of course, considering how limited HFT revenue is compared to other forms of trading, it's likely that the benefits are just smaller in proportion. So I don't see, from the article, that HFT is necessarily socially useless. Rather, I see that it is likely useful in a moderately small way spread out over a lot of people (most people in the markets). The benefit is not obvious or concrete, but that doesn't mean it doesn't exist. Similarly, the article complains about how bots just quote each other prices without necessarily making a trade. I don't see how this is a bad thing. All it means is that their quotes are at a much higher resolution than manual quotes, that's all. This seems like it would generally be a good thing. Now, I'm not saying that HFT is not without its own risk or issues--they're just not the issues brought up in the article. Or, in fact, in most popular articles: popular reporters want to turn HFT into a moral issue and paint HFT firms as evil manipulators, when they really aren't. The actual risks of HFT are more structural and technical, which, I suppose, is not great for a broad audience or lots of pageviews! It's also not immediately clear that HFT should be banned or how to deal with it. Many proposals I've heard would reduce liquidity beyond affecting just HFT, raising real costs for consumers. Ultimately, this is why there has not been much regulation in the space! [1]: http://247wallst.com/investing/2013/03/24/high-frequency-trading-profits-crushedbut-danger-remains-unchecked/ http://247wallst.com/investing/2013/03/24/high-frequency-tra...
- michaelt 13y ago
  See, here's the thing I don't understand about liquidity: If it's so valuable for trades to execute in microseconds instead of seconds, and the stock exchanges recognize this value and provide co-location etc to enable it, why are so many stock exchanges closed for half to two thirds of the day? [1] Surely the 15+ hour shut downs are a much bigger limit to liquidity than a few microseconds here and there? There's obviously no technical reason - I don't see Amazon or Google closing down their websites from 4pm to 9:30am. And if it's about the release of news, that only really needs a window of an hour or so. [1] https://en.wikipedia.org/wiki/List_of_stock_exchange_opening_times https://en.wikipedia.org/wiki/List_of_stock_exchange_opening...
_random_ 13y ago
I don't mind one of the few industries where developers can get relatively good money without being a founder (here in UK).
dschiptsov 13y ago
"High-Speed" is redundant.) With a very few exceptions, modern trading is a form of cheating, based on mass-media powered deceptions (we have full-time satellite channel - TLC, which promotes premium (read: overpriced) and/or "chap-but-healthy" fast-food chains) and "optimizations" such as purchasing a "30% meat stuff" at a penny price and adding lots of spices and synthetic sauces, etc.) Why should it be different in finance? Especially in speculative trading.)
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throwwit 13y ago
Are there any protections in place for if an investor is hovering a cursor over a buy button that the stock doesn't get pumped up?
mjstahl 13y ago
I don't know how I personally feel about HFT. I don't have a high enough view of the system as a whole to make a determination if HFT is or will be a problem. But the mention (http://www.cnbc.com/id/100809395 http://www.cnbc.com/id/100809395) of Reuters selling data to customers 2 seconds before the conference calls (which occurr 5 minutes before the public receives the data) unsettles me a bit. Two seconds isn't a long time except when you consider that HFT operates in milli, micro, or maybe even nano seconds. I am not sure whether I would go as far as to consider it insider trading, but I do think the conference call and the data meant for HFT should all be released at the same time as the public data.
- maxerickson 13y ago
  But that isn't public data, it is private research. That a university is doing the work muddies the water, but pretend that a private institute is selling access to its research, what benefit is there in telling it how to sell the data?
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stuaxo 13y ago
In other news gravity works on apples and spicy food can be enjoyable.
Tycho 13y ago
No new insights in this article. What I've been thinking about recently though is that the problems HFT companies work on may have unexpected benefits in other fields. For instance they are working on things like machine learning, transmission speed, long range networking, mathematical modelling, and software. If we were to ban HFT we would lose the potential upside of all this. In the words of NN Taleb, this sort of 'stochastic tinkering' is primarily how scientific progress is made.
stormqloud 13y ago
Anybody that has looking into things like the voodoo of "doji candlestick strategy" etc realizes that the entire market is full of people reading tea leaves. 99% of the portfolio managers, investment professionals have no more luck in picking stock then HFT or these other strategies. It's basically gambling in one form or another. The ony way to get ahead in that world is to cheat. HFT by itself isnt; a problem. When juiced with regular insider information, front running your own clients etc it's a massively profitable biz. The biggest crowd that hates HFT is the stock pickers, day traders (any left?) and others that work int he investment biz. They have had a nice scam going for the last hundred years and you are ruining their party. Haw can they go have cocktails at 4 pm every day when computer programmers are working hard all night long? The other group of course are the luddites. Afraid of any advance in technology. Other favorite causes, "Kids and violent video games". "The 100 mile diet" "environmental anything".
vasilipupkin 13y ago
Here is the problem that I have with this whole "socially useful" line of reasoning: Do we have philosopher kings or benevolent rules who are able to accurately designate social usefullness and ban or allow things on the basis of it? Is facebook or snapchat socially useful? Are hamburgers socially useful? what about french fries? Whether or not HFT is socially useful is irrelevant. Since there is no harm to a long term investor from someone trading 50 millisecond early, etc. , HFT should be left alone to do what it wants to do.
- eplumlee 13y ago
  A case could be made that HFT is beneficial to society. The author is incapable of demonstrating exactly how HFT is "bad" beyond just claiming it's "bad". I submit that the speed at which a market can respond to changing conditions is a measure of it's health. I believe many people would be surprised to learn that they're already engaging in HFT, by way of their pensions at the least. Mom and pop traders have already experienced significant disadvantages with regard to day-trading. Long-term trading is usually best for them.
- joshsegall 13y ago
  It's not about banning or allowing, it's about counting the true costs and benefits of the trade, not the immediate effects. And you don't need philosopher kings to do this, just basic math and science. This particular article may not make a good case for the harm of HFT, but that doesn't mean there isn't any. And yes, there are serious researchers that are pointing out hidden costs for things like facebook, hamburgers, and french fries. Those things may have demonstrable value, but that doesn't mean the value outweighs the cost or that they are correctly priced. For example, some studies put the true price of a hamburger at around $30 based on the burden put on healthcare and the environment, which are ultimately paid by other people. With perfect information, those costs should be factored into the trade, but they aren't. So, while HFT might have some small benefit to market liquidity as claimed by other comments, I can easily believe there are hidden costs that would outweigh such small benefits. I don't have any evidence to provide in this specific case, but I would support research to investigate whether we are overcounting the benefits or undercounting the costs.
scotty79 13y ago
> I'm pretty sure—or at least I hope—that Red Auerbach was kidding when he told a gym full of kids to cheat to get ahead. He didn't tell them to cheat. He told them that to gain competitive advantage you cheat. Games are mostly random so you can get ahead without getting competitive advantage. And you don't even need to get ahead to have almost all benefits of playing the game or even some other benefits that you can't get when you have an advantage. I think that attitude towards cheaters is pretty much an american (maybe british?) cultural thing. Lot's of people were successfully taught to be honest, and if they can't be honest to defend the ideal of honesty by teaching honesty and never admitting their dishonesty. People who are honest about their dishonesty meet exasperation and disbelieve. > If a company sold hedge funds an early look at their earnings, it'd be insider trading. But when a third-party like Business Wire sells hedge funds an early, albeit split-second, look at corporate earnings, it's perfectly legal. It's nuts. Nuts is the fact that insider trading is illegal. It's unenforceable idea of how to make intrinsically unfair game appear sort of fair. It comes from the fact that shares are not as attractive as they need to be on their own. Possessing part of some company and getting dividends when the company decides to pay them is not incentive enough to shell out your cash and give it to the company that needs the cash to develop. Since people love to participate in lotteries (before taxes it was the way money was gathered for expensive projects, people were just voluntarily were giving their money away in hopes of winning the big prize) they attached sort of casino to the idea of shares. The game is mostly: guess future ratio of supply and demand for pieces of paper. But people don't like to play in the casinos that are known to rig the games and despite the fact that price is random as it depends on so many different pieces of information some information can have some predictable influence. So casino (exchange and companies) pinky swear to prevent anyone from acting on the knowledge that gamers didn't have chance to familiarize themselves with. It works. I makes the game look fair. Of course insider still trading exists because you can't tell it apart from luck if you can't trace where the information leaked. And you can do that only rarely.
farginay 13y ago
He starts with an anecdote about cheating and then lays out HFT an implies it is cheating without saying how. If he had to defend his assertion that it is cheating he wouldn't have an article.
omilu 13y ago
maybe i didn't read the piece accurately enough, but i don't get why it's cheating. It's about ingenuity and the ability to allocate money to where you think the market will move. It's been this way since the beginning. We do the samething with our 401k.
Houshalter 13y ago
The problem is someone is always going to get important information and act on it first in a market. A tax wouldn't stop that, it would just make small transactions more expensive (for both parties.) I don't know if this is a real problem or how to fix it but this article is entirely useless.
arikrak 13y ago
HST doesn't sound that useful, but the article didn't really say much or show that they're cheaters.
radikalus 13y ago
The clueless preaching to the more clueless? Early data access has been around for a decade and generally has NOTHING to do with HFT. Events desks typically have very different architecture than other groups in HFT, and, well, are a very very small cog.
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philrapo 13y ago
Distributed exchange architecture is an interesting alternative: https://ripple.com/blog/ripples-distributed-exchange-and-the-high-frequency-trading-arms-race/ https://ripple.com/blog/ripples-distributed-exchange-and-the... When there's no central location towards which orders need to race to get time stamped, the whole low latency arms race seems unnecessary. There's also no central place to co-locate servers. Some of the existing traditional (centralized) exchanges are making 20-30%+ of their revenues from co-location and data fees. So they have little incentive to change. They cater to HFT because it's a big driver of their bottom line...
kasey_junk 13y ago
I assume folks who advocate for a transaction tax don't actually want less transactions, rather they want more "real" transactions and a less artificially volatile market place. Unfortunately, a transaction tax would create the exact opposite of that situation. The hypothesis that if there were a transaction tax there would be less transactions is incorrect. What would happen is that transaction quantities would get bigger in order to overcome the new added cost. These larger transactions would magnify the risk at play in the market place. This in turn would raise the reward for being able to pull out of quotes faster and/or to misrepresent the riskiness of your trading strategy. So a transaction tax would actually incentivize more "false" liquidity and work to the betterment of companies that are more risky. What HFT systems actually do, is allow firms to "pay" for priority of an order at a price level, by investing in network infrastructure/algorithms. If you want remove that advantage the easiest way would be a system where you transparently pay for priority of an order. The system with the least likely negative side impacts of this would be making arbitrary price level sizes. That is, instead of quoting down only the penny level, let people quote arbitrary (or some fixed but very small) decimals of a penny. That way if you really want to pay up for priority, you can just increment your order slightly and actually pay for the privilege.
- minimax 13y ago
  We actually have a system similar to what you describe in your last paragraph with the three "inverted" US equity exchanges where liquidity providers pay a fee and liquidity takers receive a rebate. It means that shares posted to the inverted exchanges are cheaper (net of fees) to aggressors than shares posted to other exchanges, so liquidity takers with a smart order router will look first to the inverted exchanges before the other exchanges.
ChristianMarks 13y ago
An example of privileged, well-connected parties systematically winning asymmetric zero-sum games against the not so well connected. I'll believe that HFT adds liquidity to the market when the typical retirement horizon is 15 milliseconds. HFT proponents seem not to (or pretend not to) understand diminishing returns where "adding liquidity to the market" is concerned.
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PythonicAlpha 13y ago
The stock exchange has just become the ultimate casino today. Yesterday, stock exchange helped to build companies, to have some security against bad crops and so on ... but that has changed. More and more money is just made by gambling and the more money is made, the more money is again put into the big gambling machine. It is legal, but just gambling and we all have to pay the price, because the gamblers carry the wealth of the Earth away -- and the others are left empty.
kyleblarson 13y ago
Key quote: "Now, what they do is strictly legal". This article felt like it was written by a college freshman who just took their first class on "social justice".
michaelochurch 13y ago
Actually, HFT is socially useful in the same way that Cold War research, even though most of it never went anywhere, is. It bids up the price of talent, and that's an inherent social good because it means there is a chance for smart people to get into decision-making positions (which, otherwise, go to entitled, and mostly untalented, incumbents and their shitty offspring). Google and Amazon would not be paying $140k per year for mid-career software engineers, were it not for the hedge funds paying $200k. VC-istan is terrible, with founders lucky to get 10% and earliest employees getting 0.1-1%, but if Wall Street wasn't absorbing most of the top talent (and it is) those numbers would be closer to 1% and 0.001-0.05%. Instead of very few people getting rich in the tech lottery, it'd be almost no one, because the founders and early engineers would have zero leverage. The HN crowd likes to assume that talented people will, as if it were a law of nature, have options to rise economically and socially. It's not so. If it weren't for socially useless talent vampires like HFT and online ad targeting, talent would have even less leverage against the good-ol'-boy networks and widespread stagnation would ensue. (High levels of funding, probably originating from governments at first, for basic research would achieve the same effect in a socially useful way, but I wouldn't hold my breath.)
- smoorman1024 13y ago
  Interesting way too take the conversation but valid.
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148 points by gz5 13y ago

I've never really understood the stock market. Is this basically how it works? A person can make or sell things, but that person is limited in the scope of their business by their available capital. Thus, they can increase their capital by either securing a business loan or by making their company "public." Securing a business loan is risky, because they will still have to pay back the loan regardless of whether or not their company makes any money. Going public carries additional risks, but at least they aren't on the hook if the business fails - and there's an added benefit of the potential for enormous gains in capital which can further increase their business potential. So, the person "goes public" which is extremely complex and time consuming, but let's say they are able to convince 100 people that they should each buy a "share" of the company. This means that the more money that the company earns in profit, that a little bit of that profit is "owned" by each person who owns a share. Right? (I am legitimately asking here, because as I said I really don't understand much of the way it works.) So, now we have stock exchanges. These are places that people can buy, sell, or trade stocks of different companies for cash or other assets? I own one share of Company A and that share is worth $51 right now. Later in the day, however, we see that company A has earned a little bit more money than we thought it was going to, and so now my stock is worth $53. And I originally purchased the stock for $47, so I can potentially sell that stock for a $6 profit, or I can hang on to it and hope that it goes a little higher. However, humans can only act so quickly, and day-traders and short-sellers act on stocks in the span of minutes or hours. So if I purchase 10,000 shares of Company B at 10:00 for $5 each, and then sell those same 10,000 shares back at 10:04 for $5.02 each, then I have made a small profit. And large firms do this hundreds of times each day, with dozens of companies, and likely tens of thousands of stocks. Right? So, HFT does the same thing. Except, instead of making a purchase-sell decision every few minutes, they do it every few microseconds. And the returns per transaction are something like... .0000034 per share (this is a guess), but over tens of thousands of shares, and millions of times a day. Right? This, however, is where my understanding breaks down completely. HFT obviously benefits a company that can wield it. If my hedge fund can hire the programmers, run the servers, and buy the licenses to the data then I stand to make huge profits for a minimal investment when my HFT "algobots (lol)" do their thing. But I don't understand how this benefits the rest of the market? I'm guessing that most of these HFT bots are not being run by small-time investors, and in fact that the trades made by small-time investors will be heavily influenced by the HFT trades that are made in-between the time the guy using E-Trades can point on the "Buy!" button and the time he can click on it. And as a consumer who does not participate in the stock market (in that I do not have an investment portfolio, I realize that the stock market influences me regardless of whether or not I put money into it), I really don't get how HFT helps me. What it looks like to me, is that players who have the most money, and who have the best technology will have a benefit over players who lack those resources. And so while there's no evidence (that I'm aware of) that these HFT-using companies are committing any malfeasance, it looks like the natural side-effect is that the market becomes more one-sided. I would liken this to a professional athlete using steroids (let's pretend that steroids aren't illegal). Steroid use may stem from the player simply wanting to maximize their ability to use their body, and so they enhance their muscles and work hard to be able to control them. This player isn't actively trying to cheat, he is simply using technology to overcome a natural hurdle (let's also assume that this same player has, through hard work, literally pushed their body to the limit of what it can naturally achieve). However, a similar player who has also pushed their body to the limit is either unable or unwilling to use steroids, and thus they are unable to compete against the other due to the slight technical advantage. Is this a true analogy?

shabble 13y ago
I'm not entirely clear on the exact process either, but I think your initial summary has it mostly correct. There are additional complexities in Share Dividends (you receive a fraction of the companies profits proportional to your number of shares owned, which incentivises not-selling, to a point) The basic issue that HFT (and markets in general) seek to solve is liquidity - the ability to buy & sell when you want, rather than having to wait while a deal is worked out. Consider the differences in process when buying/selling a commodity such as gold, vs buying a particular house. There's a good overview of the mechanics & benefits of [HF]T in the 'A High Frequency Trader's Apology'[0] series, written by HN member yummyfajitas. [0] http://www.chrisstucchio.com/blog/2012/hft_apology.html http://www.chrisstucchio.com/blog/2012/hft_apology.html
- Lazare 13y ago
  That's an excellent series of posts. Thanks for the link!
Lazare 13y ago
Kinda. A few points to help clarify things: All funds that go into the business will either be debt or equity. Debt gets a guaranteed rate of return, and needs to be paid back. It gets first claim if you go under, but gets no "bonus" if you do well. Equity is an ownership stake; last in line if you go under, but with a claim on all future profits if you do well. The most obvious type of equity stake is your own, but you might say to a friend hey, go halves with me on buying a new lathe, and I'll split the profits from the furniture I make 50/50. That's another example of an equity stake, as old as the hills. All a stock market is, is your friend saying "look, I've got the note saying I have a right to 50% of the profits of Zac's furniture business, but I'm broke right now; anyone wanna give me $50 for it?". And because in practice this sort of thing is fraught with risk, this is incredibly regulated, but that's all a stock market is; people trading the right to some uncertain future profits. (Well...kinda. There's also the question of control. Some shares give you a say in how a company is run; some don't. That's rarely a factor though.) Notionally, incidentally, the value of a company's stock is the discounted sum of all future cash flows. If you owe 100% of Amazon, obviously you have the right to 100% of all future profit they make. If you owe 0.0001% of Amazon, you have the right to 0.0001% of all future profit they make. That's the core driver of stock prices; the market's ever-changing estimation of a companies future. As for HFT...no, you won't make huge profits. The entire HFT industry, globally, makes chicken feed, but they make for VERY entertaining news stories, so you read about them a ton. Anyhow, as to "why HFT is good", the answer is basically that we all benefit when markets work better, and one way markets can work better is if they are deep and liquid. In simple terms, that means that if you want to buy or sell something, there's always someone there offering to take the other side of the trade for more-or-less the market rate. Conversely, housing is a very shallow, very illiquid market. If you want to sell your $400k house, it might takes weeks or months, and you may find yourself happily paying significant fees to the broker, and maybe even selling it at a discount, just to get the damn thing to sell. If you want to sell your share of Apple stock, it will take microseconds, and you'll get very close to the market rate (ie, low commission/low spread). And while HFT doesn't have a huge impact, to the extent it has an impact, it is to make the market deeper, more liquid, and more efficient. HFT benefits the HFT traders, but it also, and this is really, really, important to grasp benefits every person who trades with the HFT traders. The losers are the "low frequency traders" who would have bought your Apple share from you a little slower and for a little less money, but lost out. But again, this effect is minimal. The drive for HFT is the race for pennies in an increasingly efficient and competitive market. Small time investors, honestly, aren't the victims here. (Unless they're doing the day-trading, "I can pick stocks because I read a book on trend analysis" thing, in which case...they're absolutely screwed, but no more so now than before HFT. The stock market is not a game.) And no, I wouldn't say the market is becoming "more one-sided"; that presupposes there being two sides. There aren't; there are seven billion sides. HFT does not profit at the expense of pension funds or entrepreneurs; it profits at the expense of everyone else who wanted to profit from them. And I think the sports analogy is especially inapt. We want markets to work as efficiently as possible. We want sports to provide a spectacle. These things are not similar.

moron4hire 13y ago

HFT is more likely about front-loading their own customers' orders than it is about reacting efficiently to price changes.

gaius 13y ago

Lost me at That brings us to high-frequency trading (HFT) hedge funds. These funds use computer algorithms—a.k.a.: algobots No-one says this. I'm not involved in HFT myself but I know a bunch of people who are, there is a jargon word, but it's not that.

cake 13y ago
A quick Googling reveals that some people do use algobot to talk about HFT software. I guess it's a dumbed down idea to sell to the masses.
crntaylor 13y ago
You tend to hear high frequency traders refer to the code that makes pricing and trading decisions as a system, or signal, or model, or (very occasionally) algo (all refer to slightly different things) but I have never heard them refer to the code that makes trading decisions as a bot or algobot. Source: I used to work in high frequency trading.
CoolGuySteve 13y ago
I'm in the industry, nobody calls it an "algobot". It sounds ridiculous and doesn't really express much. I'm guessing someone was winding up the reporter, as from reading the article it seems obvious the person is in over their head. Reminds me of the (possibly apocryphal) story of how a bunch of teenagers made fun of a 20/20 reporter by describing a made up word "mosh pit", and then it caught on.

yummyfajitas 13y ago

I don't get it. The article first criticizes HFT for making markets rather than speculating, incorrectly asserting that it's somehow a tax on traders (hint: don't cross the spread if you don't want to pay the "tax"). Then it reveals that HFT does speculate - they pay people to do market research and trade on that basis, which is somehow also evil. Damned if they do, damned if they don't I guess. The authors reasoning in going from HFT engaging in speculation to a financial transaction tax is unclear. He wants to prevent speculation and information gathering? Or prevent people from speculating quickly?

ronaldx 13y ago
The author's point is clear - that HFT adds no value to society ("socially worthless"). I don't believe that he wants to prevent anything, but he suggests that trades should be taxed to create some value to society from this. He is suggesting their value (at the moment) is exclusively to the benefit of making rich people - who can pay for access early information and technology - richer.
- gaius 13y ago
  It's not clear what journalism of this quality does to create some value for society. Just sayin'.
  - williamcotton 13y ago
    Well, fortunately for you his journal isn't a quasi-governmental entity. Unfortunately for your argument, our stock markets are. They wouldn't be remotely viable if they weren't supported and regulated by government. In exchange for the tax payer funded assistance is the social benefit of keeping the whole thing running. Or would you like to test the viability of a market with no government oversight and no government enforcement of contracts?
    - yummyfajitas 13y ago
      How would you build a newspaper or magazine without government enforcement of contracts and copyright? If you want to claim an HFT shop is "quasi-governmental" because contracts are enforced, then basically every enterprise in the world is "quasi-governmental" (except for the black market).

bbosh 13y ago

The primary function of the stock market is to exchange ownership (shares) in a company. It's odd that we seem to have forgotten that. What value is there in a computer owning a stock for 10 milliseconds?

drunkpotato 13y ago
I've read elsewhere on here that the value of high-frequency trading is that it reduces transaction costs and increases liquidity in the market. I.e. it makes it easier for the humans to buy and sell at the prices they wish to buy and sell at. Assuming that's true, the question then becomes what are the costs and externalities of HFT and, in balance, are we willing to make those trade-offs? I haven't seen anything addressing those issues yet, but I haven't been looking either. HFT experts want to weigh in, pro/con/otherwise?
- yscale 13y ago
  HFTs tend to add liquidity when it's least valuable, and they tend to consume liquidity when it's most vital. For example, an analysis of the 2010 flash crash shows it was worsened by HFTs fleeing their positions once volatility increased, which is the exact time that liquidity and market-making are most valuable. If there is any social benefit to HFT it is utterly trivial.
- yummyfajitas 13y ago
  Since most of the people commenting here don't seem to even understand HFT, I'll just leave this here (a tutorial I wrote a while back): http://www.chrisstucchio.com/blog/2012/hft_apology.html http://www.chrisstucchio.com/blog/2012/hft_apology.html http://www.chrisstucchio.com/blog/2012/hft_apology2.html http://www.chrisstucchio.com/blog/2012/hft_apology2.html http://www.chrisstucchio.com/blog/2012/hft_whats_broken.html http://www.chrisstucchio.com/blog/2012/hft_whats_broken.html
  - rtpg 13y ago
    you should probably link part 2 from the end of part 1, if not it's not obvious that you did write part 2.

tikhonj 13y ago

A few immediate thoughts: Transaction volume is ultimately not the important metric--revenue is. And, following [1], it seems that the total revenue for HFT was probably around $2Billion in 2013--for a whole industry, that's not very much! Measuring transaction volume is akin to comparing shipping between Amazon and Walmart ignoring the fact that Amazon ships directly to consumers while Walmart mostly ships to large Walmart stores. "...increasing liquidity is the last refuge of bullshitters" is not an argument--it's an assertion. That was not really supported. Liquidity is a good thing; the article claims that HFT does not help much because most of the actual benefits happened before its advance. Of course, considering how limited HFT revenue is compared to other forms of trading, it's likely that the benefits are just smaller in proportion. So I don't see, from the article, that HFT is necessarily socially useless. Rather, I see that it is likely useful in a moderately small way spread out over a lot of people (most people in the markets). The benefit is not obvious or concrete, but that doesn't mean it doesn't exist. Similarly, the article complains about how bots just quote each other prices without necessarily making a trade. I don't see how this is a bad thing. All it means is that their quotes are at a much higher resolution than manual quotes, that's all. This seems like it would generally be a good thing. Now, I'm not saying that HFT is not without its own risk or issues--they're just not the issues brought up in the article. Or, in fact, in most popular articles: popular reporters want to turn HFT into a moral issue and paint HFT firms as evil manipulators, when they really aren't. The actual risks of HFT are more structural and technical, which, I suppose, is not great for a broad audience or lots of pageviews! It's also not immediately clear that HFT should be banned or how to deal with it. Many proposals I've heard would reduce liquidity beyond affecting just HFT, raising real costs for consumers. Ultimately, this is why there has not been much regulation in the space! [1]: http://247wallst.com/investing/2013/03/24/high-frequency-trading-profits-crushedbut-danger-remains-unchecked/ http://247wallst.com/investing/2013/03/24/high-frequency-tra...

michaelt 13y ago
See, here's the thing I don't understand about liquidity: If it's so valuable for trades to execute in microseconds instead of seconds, and the stock exchanges recognize this value and provide co-location etc to enable it, why are so many stock exchanges closed for half to two thirds of the day? [1] Surely the 15+ hour shut downs are a much bigger limit to liquidity than a few microseconds here and there? There's obviously no technical reason - I don't see Amazon or Google closing down their websites from 4pm to 9:30am. And if it's about the release of news, that only really needs a window of an hour or so. [1] https://en.wikipedia.org/wiki/List_of_stock_exchange_opening_times https://en.wikipedia.org/wiki/List_of_stock_exchange_opening...

_random_ 13y ago

I don't mind one of the few industries where developers can get relatively good money without being a founder (here in UK).

dschiptsov 13y ago

"High-Speed" is redundant.) With a very few exceptions, modern trading is a form of cheating, based on mass-media powered deceptions (we have full-time satellite channel - TLC, which promotes premium (read: overpriced) and/or "chap-but-healthy" fast-food chains) and "optimizations" such as purchasing a "30% meat stuff" at a penny price and adding lots of spices and synthetic sauces, etc.) Why should it be different in finance? Especially in speculative trading.)

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throwwit 13y ago

Are there any protections in place for if an investor is hovering a cursor over a buy button that the stock doesn't get pumped up?

mjstahl 13y ago

I don't know how I personally feel about HFT. I don't have a high enough view of the system as a whole to make a determination if HFT is or will be a problem. But the mention (http://www.cnbc.com/id/100809395 http://www.cnbc.com/id/100809395) of Reuters selling data to customers 2 seconds before the conference calls (which occurr 5 minutes before the public receives the data) unsettles me a bit. Two seconds isn't a long time except when you consider that HFT operates in milli, micro, or maybe even nano seconds. I am not sure whether I would go as far as to consider it insider trading, but I do think the conference call and the data meant for HFT should all be released at the same time as the public data.

maxerickson 13y ago
But that isn't public data, it is private research. That a university is doing the work muddies the water, but pretend that a private institute is selling access to its research, what benefit is there in telling it how to sell the data?

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stuaxo 13y ago

In other news gravity works on apples and spicy food can be enjoyable.

Tycho 13y ago

No new insights in this article. What I've been thinking about recently though is that the problems HFT companies work on may have unexpected benefits in other fields. For instance they are working on things like machine learning, transmission speed, long range networking, mathematical modelling, and software. If we were to ban HFT we would lose the potential upside of all this. In the words of NN Taleb, this sort of 'stochastic tinkering' is primarily how scientific progress is made.

stormqloud 13y ago

Anybody that has looking into things like the voodoo of "doji candlestick strategy" etc realizes that the entire market is full of people reading tea leaves. 99% of the portfolio managers, investment professionals have no more luck in picking stock then HFT or these other strategies. It's basically gambling in one form or another. The ony way to get ahead in that world is to cheat. HFT by itself isnt; a problem. When juiced with regular insider information, front running your own clients etc it's a massively profitable biz. The biggest crowd that hates HFT is the stock pickers, day traders (any left?) and others that work int he investment biz. They have had a nice scam going for the last hundred years and you are ruining their party. Haw can they go have cocktails at 4 pm every day when computer programmers are working hard all night long? The other group of course are the luddites. Afraid of any advance in technology. Other favorite causes, "Kids and violent video games". "The 100 mile diet" "environmental anything".

vasilipupkin 13y ago

Here is the problem that I have with this whole "socially useful" line of reasoning: Do we have philosopher kings or benevolent rules who are able to accurately designate social usefullness and ban or allow things on the basis of it? Is facebook or snapchat socially useful? Are hamburgers socially useful? what about french fries? Whether or not HFT is socially useful is irrelevant. Since there is no harm to a long term investor from someone trading 50 millisecond early, etc. , HFT should be left alone to do what it wants to do.

eplumlee 13y ago
A case could be made that HFT is beneficial to society. The author is incapable of demonstrating exactly how HFT is "bad" beyond just claiming it's "bad". I submit that the speed at which a market can respond to changing conditions is a measure of it's health. I believe many people would be surprised to learn that they're already engaging in HFT, by way of their pensions at the least. Mom and pop traders have already experienced significant disadvantages with regard to day-trading. Long-term trading is usually best for them.
joshsegall 13y ago
It's not about banning or allowing, it's about counting the true costs and benefits of the trade, not the immediate effects. And you don't need philosopher kings to do this, just basic math and science. This particular article may not make a good case for the harm of HFT, but that doesn't mean there isn't any. And yes, there are serious researchers that are pointing out hidden costs for things like facebook, hamburgers, and french fries. Those things may have demonstrable value, but that doesn't mean the value outweighs the cost or that they are correctly priced. For example, some studies put the true price of a hamburger at around $30 based on the burden put on healthcare and the environment, which are ultimately paid by other people. With perfect information, those costs should be factored into the trade, but they aren't. So, while HFT might have some small benefit to market liquidity as claimed by other comments, I can easily believe there are hidden costs that would outweigh such small benefits. I don't have any evidence to provide in this specific case, but I would support research to investigate whether we are overcounting the benefits or undercounting the costs.

scotty79 13y ago

> I'm pretty sure—or at least I hope—that Red Auerbach was kidding when he told a gym full of kids to cheat to get ahead. He didn't tell them to cheat. He told them that to gain competitive advantage you cheat. Games are mostly random so you can get ahead without getting competitive advantage. And you don't even need to get ahead to have almost all benefits of playing the game or even some other benefits that you can't get when you have an advantage. I think that attitude towards cheaters is pretty much an american (maybe british?) cultural thing. Lot's of people were successfully taught to be honest, and if they can't be honest to defend the ideal of honesty by teaching honesty and never admitting their dishonesty. People who are honest about their dishonesty meet exasperation and disbelieve. > If a company sold hedge funds an early look at their earnings, it'd be insider trading. But when a third-party like Business Wire sells hedge funds an early, albeit split-second, look at corporate earnings, it's perfectly legal. It's nuts. Nuts is the fact that insider trading is illegal. It's unenforceable idea of how to make intrinsically unfair game appear sort of fair. It comes from the fact that shares are not as attractive as they need to be on their own. Possessing part of some company and getting dividends when the company decides to pay them is not incentive enough to shell out your cash and give it to the company that needs the cash to develop. Since people love to participate in lotteries (before taxes it was the way money was gathered for expensive projects, people were just voluntarily were giving their money away in hopes of winning the big prize) they attached sort of casino to the idea of shares. The game is mostly: guess future ratio of supply and demand for pieces of paper. But people don't like to play in the casinos that are known to rig the games and despite the fact that price is random as it depends on so many different pieces of information some information can have some predictable influence. So casino (exchange and companies) pinky swear to prevent anyone from acting on the knowledge that gamers didn't have chance to familiarize themselves with. It works. I makes the game look fair. Of course insider still trading exists because you can't tell it apart from luck if you can't trace where the information leaked. And you can do that only rarely.

farginay 13y ago

He starts with an anecdote about cheating and then lays out HFT an implies it is cheating without saying how. If he had to defend his assertion that it is cheating he wouldn't have an article.

omilu 13y ago

maybe i didn't read the piece accurately enough, but i don't get why it's cheating. It's about ingenuity and the ability to allocate money to where you think the market will move. It's been this way since the beginning. We do the samething with our 401k.

Houshalter 13y ago

The problem is someone is always going to get important information and act on it first in a market. A tax wouldn't stop that, it would just make small transactions more expensive (for both parties.) I don't know if this is a real problem or how to fix it but this article is entirely useless.

arikrak 13y ago

HST doesn't sound that useful, but the article didn't really say much or show that they're cheaters.

radikalus 13y ago

The clueless preaching to the more clueless? Early data access has been around for a decade and generally has NOTHING to do with HFT. Events desks typically have very different architecture than other groups in HFT, and, well, are a very very small cog.

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philrapo 13y ago

Distributed exchange architecture is an interesting alternative: https://ripple.com/blog/ripples-distributed-exchange-and-the-high-frequency-trading-arms-race/ https://ripple.com/blog/ripples-distributed-exchange-and-the... When there's no central location towards which orders need to race to get time stamped, the whole low latency arms race seems unnecessary. There's also no central place to co-locate servers. Some of the existing traditional (centralized) exchanges are making 20-30%+ of their revenues from co-location and data fees. So they have little incentive to change. They cater to HFT because it's a big driver of their bottom line...

kasey_junk 13y ago

I assume folks who advocate for a transaction tax don't actually want less transactions, rather they want more "real" transactions and a less artificially volatile market place. Unfortunately, a transaction tax would create the exact opposite of that situation. The hypothesis that if there were a transaction tax there would be less transactions is incorrect. What would happen is that transaction quantities would get bigger in order to overcome the new added cost. These larger transactions would magnify the risk at play in the market place. This in turn would raise the reward for being able to pull out of quotes faster and/or to misrepresent the riskiness of your trading strategy. So a transaction tax would actually incentivize more "false" liquidity and work to the betterment of companies that are more risky. What HFT systems actually do, is allow firms to "pay" for priority of an order at a price level, by investing in network infrastructure/algorithms. If you want remove that advantage the easiest way would be a system where you transparently pay for priority of an order. The system with the least likely negative side impacts of this would be making arbitrary price level sizes. That is, instead of quoting down only the penny level, let people quote arbitrary (or some fixed but very small) decimals of a penny. That way if you really want to pay up for priority, you can just increment your order slightly and actually pay for the privilege.

minimax 13y ago
We actually have a system similar to what you describe in your last paragraph with the three "inverted" US equity exchanges where liquidity providers pay a fee and liquidity takers receive a rebate. It means that shares posted to the inverted exchanges are cheaper (net of fees) to aggressors than shares posted to other exchanges, so liquidity takers with a smart order router will look first to the inverted exchanges before the other exchanges.

ChristianMarks 13y ago

An example of privileged, well-connected parties systematically winning asymmetric zero-sum games against the not so well connected. I'll believe that HFT adds liquidity to the market when the typical retirement horizon is 15 milliseconds. HFT proponents seem not to (or pretend not to) understand diminishing returns where "adding liquidity to the market" is concerned.

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PythonicAlpha 13y ago

The stock exchange has just become the ultimate casino today. Yesterday, stock exchange helped to build companies, to have some security against bad crops and so on ... but that has changed. More and more money is just made by gambling and the more money is made, the more money is again put into the big gambling machine. It is legal, but just gambling and we all have to pay the price, because the gamblers carry the wealth of the Earth away -- and the others are left empty.

kyleblarson 13y ago

Key quote: "Now, what they do is strictly legal". This article felt like it was written by a college freshman who just took their first class on "social justice".

michaelochurch 13y ago

Actually, HFT is socially useful in the same way that Cold War research, even though most of it never went anywhere, is. It bids up the price of talent, and that's an inherent social good because it means there is a chance for smart people to get into decision-making positions (which, otherwise, go to entitled, and mostly untalented, incumbents and their shitty offspring). Google and Amazon would not be paying $140k per year for mid-career software engineers, were it not for the hedge funds paying $200k. VC-istan is terrible, with founders lucky to get 10% and earliest employees getting 0.1-1%, but if Wall Street wasn't absorbing most of the top talent (and it is) those numbers would be closer to 1% and 0.001-0.05%. Instead of very few people getting rich in the tech lottery, it'd be almost no one, because the founders and early engineers would have zero leverage. The HN crowd likes to assume that talented people will, as if it were a law of nature, have options to rise economically and socially. It's not so. If it weren't for socially useless talent vampires like HFT and online ad targeting, talent would have even less leverage against the good-ol'-boy networks and widespread stagnation would ensue. (High levels of funding, probably originating from governments at first, for basic research would achieve the same effect in a socially useful way, but I wouldn't hold my breath.)

smoorman1024 13y ago
Interesting way too take the conversation but valid.

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