2 ms·

BD == your agent, has fiduciary duty to you...etc "When executing trade orders on behalf of a customer, the institution is said to be acting as a broker" http

by 001sky 13y ago

BD == your agent, has fiduciary duty to you...etc "When executing trade orders on behalf of a customer, the institution is said to be acting as a broker" https://en.wikipedia.org/wiki/Broker-dealer https://en.wikipedia.org/wiki/Broker-dealer

tptacek 13y ago
Nobody you are talking about in either scenario is doing that.
- 001sky 13y ago
  Explain 'nobody', 'scenario' and 'that'? This sidebar conv. seems to be degrading a bit. General comment: I think you are over simplifying the P&L of a trader. The HFT stuff impacts hedging costs. And the ability to solicit grey/NPI. Note they are not urelated. Also, if you just look at bid/ask and Volume...you never see the $$ value of this. Las comment: the so called: "profit guarantees" just means perfectly hedged trades with no ∆ (net exposure). its not literal its a simplification yet directionally correct.
  - tptacek 13y ago
    With all due respect, this discussion is degrading because you've responded to each of my comments with a non-sequitur. I write responses to you with zero hope of us coming any closer to shared understanding; I have the feeling less of building anything interesting in these discussions, but instead of having taken the bait.
    - 001sky 13y ago
      Look: As a general rule, people should act in good faith. That is the point I raised here when you jumped in. Its a fair counter-point to say that adding strategic uncertainty is not blanket illegal. But as a general rule, we don't encourage bad faith actors. Same is my view on posting comments to HN. The reason I raised this point with the sub-thread op is as follows. Not goint to use my own words to provide some objectivity. This is from PG, so I hope you respect it at face value. To founders, the behavior of investors is often opaque—partly because their motivations are obscure, but partly because they deliberately mislead you. And the misleading ways of investors combine horribly with the wishful thinking of inexperienced founders. At YC we're always warning founders about this danger, and investors are probably more circumspect with YC startups than with other companies they talk to, and even so we witness a constant series of explosions as these two volatile components combine.[1] This is important insight. It mentions the risk of bad faith dealings specifically and at a general level of abstraction that is intuitive to grasp. Its good reading for its intended audience. I'm going to re-word this to put this in a slightly different context (but one relevant to this thread). These are words I would not have a problem putting in front of a rookie trader on day 1 of the job: To [a rookie], the behavior of [deal counter-parties] is often opaque—partly because their motivations are obscure, but partly because they deliberately mislead you. And the misleading ways of [counter-parties] combine horribly with the wishful thinking of inexperienced [rookies -- that are unprepared]. At [Co X] we're always warning [rookies] about this danger, and [counter-parties] are probably more circumspect with [our trades] than with other companies they talk to, and even so we witness a constant series of explosions as these two volatile components combine. The motivations and ways trades can go wrong have similarities accross asset classes. Market practitioners can speak to this from experience. Over tha past 15 years or so, in particular more shops have become "stage agnostic" in PE and "asset class agnostic" in various other vehicles. The reason this is possible is because these abstractions have become better known. [1] http://paulgraham.com/fr.html http://paulgraham.com/fr.html
      - tptacek 13y ago
        Here you've done three things: * You've fled to abstraction rather than discussing the specific argument that you yourself brought up. * You've appealed to a supposed authority (Paul Graham) who is simultaneously (a) not an authority of the ethics and assumptions of trading markets and (b) not actually making any statements about trading markets. * You've begged the question, asserting that because ruthless withdrawal of a term sheet is unethical, therefore cancellation of a resting limit order must also be unethical.
        001sky 13y ago
        One should assume they are dealing with a manipulative psychopath. The only people who preach that you should not heed this advice are...you guessed it...manipulative pschopaths. =D All of the same behavioural stuff that makes people pay money to secure computer networks applies to business deals. It is just the way the world works. That is not the same advice as condoning bad faith, manipulative behaviour. The advice is to act as if bad actors exist. The advice is <not> to act "as a bad actor". When it comes to cancellations, it's way to facile to say something like 'cancelations are always possible, therefore all cancellations are always kosher'. Instead, markets are <always> structured along the lines of 'bad faith is always possible, therefore precautions are always taken'. Again, this parallels with network security so I'm sure I don't need to explain it from first principles. If you want to argue "bad faith is always possible, but..." then that's fine. You need to explain why precautions should be discarded. The idea that we should look the other way to bad faith is not justifiable as a standalone idea. You would actually need to show that bad faith could do no harm because of XYZ technological protection. If you want to make the argument that technology provides "perfect security", you are welcome to do this. But not only do you need to establish that, you also need to establish the social equivalent. That is, that all business contracts are "perfectly written" and all legal proceedings are "perfectly resolved", and that the costs of all this perfection are ~essentially zero. That is the path of least resistance for your position. see also: https://news.ycombinator.com/item?id=7523186 https://news.ycombinator.com/item?id=7523186 esp sub thread https://news.ycombinator.com/item?id=7524976 https://news.ycombinator.com/item?id=7524976

by 001sky 13y ago

tptacek 13y ago

Nobody you are talking about in either scenario is doing that.

001sky 13y ago
Explain 'nobody', 'scenario' and 'that'? This sidebar conv. seems to be degrading a bit. General comment: I think you are over simplifying the P&L of a trader. The HFT stuff impacts hedging costs. And the ability to solicit grey/NPI. Note they are not urelated. Also, if you just look at bid/ask and Volume...you never see the $$ value of this. Las comment: the so called: "profit guarantees" just means perfectly hedged trades with no ∆ (net exposure). its not literal its a simplification yet directionally correct.
- tptacek 13y ago
  With all due respect, this discussion is degrading because you've responded to each of my comments with a non-sequitur. I write responses to you with zero hope of us coming any closer to shared understanding; I have the feeling less of building anything interesting in these discussions, but instead of having taken the bait.
  - 001sky 13y ago
    Look: As a general rule, people should act in good faith. That is the point I raised here when you jumped in. Its a fair counter-point to say that adding strategic uncertainty is not blanket illegal. But as a general rule, we don't encourage bad faith actors. Same is my view on posting comments to HN. The reason I raised this point with the sub-thread op is as follows. Not goint to use my own words to provide some objectivity. This is from PG, so I hope you respect it at face value. To founders, the behavior of investors is often opaque—partly because their motivations are obscure, but partly because they deliberately mislead you. And the misleading ways of investors combine horribly with the wishful thinking of inexperienced founders. At YC we're always warning founders about this danger, and investors are probably more circumspect with YC startups than with other companies they talk to, and even so we witness a constant series of explosions as these two volatile components combine.[1] This is important insight. It mentions the risk of bad faith dealings specifically and at a general level of abstraction that is intuitive to grasp. Its good reading for its intended audience. I'm going to re-word this to put this in a slightly different context (but one relevant to this thread). These are words I would not have a problem putting in front of a rookie trader on day 1 of the job: To [a rookie], the behavior of [deal counter-parties] is often opaque—partly because their motivations are obscure, but partly because they deliberately mislead you. And the misleading ways of [counter-parties] combine horribly with the wishful thinking of inexperienced [rookies -- that are unprepared]. At [Co X] we're always warning [rookies] about this danger, and [counter-parties] are probably more circumspect with [our trades] than with other companies they talk to, and even so we witness a constant series of explosions as these two volatile components combine. The motivations and ways trades can go wrong have similarities accross asset classes. Market practitioners can speak to this from experience. Over tha past 15 years or so, in particular more shops have become "stage agnostic" in PE and "asset class agnostic" in various other vehicles. The reason this is possible is because these abstractions have become better known. [1] http://paulgraham.com/fr.html http://paulgraham.com/fr.html
    - tptacek 13y ago
      Here you've done three things: * You've fled to abstraction rather than discussing the specific argument that you yourself brought up. * You've appealed to a supposed authority (Paul Graham) who is simultaneously (a) not an authority of the ethics and assumptions of trading markets and (b) not actually making any statements about trading markets. * You've begged the question, asserting that because ruthless withdrawal of a term sheet is unethical, therefore cancellation of a resting limit order must also be unethical.
      - 001sky 13y ago
        One should assume they are dealing with a manipulative psychopath. The only people who preach that you should not heed this advice are...you guessed it...manipulative pschopaths. =D All of the same behavioural stuff that makes people pay money to secure computer networks applies to business deals. It is just the way the world works. That is not the same advice as condoning bad faith, manipulative behaviour. The advice is to act as if bad actors exist. The advice is <not> to act "as a bad actor". When it comes to cancellations, it's way to facile to say something like 'cancelations are always possible, therefore all cancellations are always kosher'. Instead, markets are <always> structured along the lines of 'bad faith is always possible, therefore precautions are always taken'. Again, this parallels with network security so I'm sure I don't need to explain it from first principles. If you want to argue "bad faith is always possible, but..." then that's fine. You need to explain why precautions should be discarded. The idea that we should look the other way to bad faith is not justifiable as a standalone idea. You would actually need to show that bad faith could do no harm because of XYZ technological protection. If you want to make the argument that technology provides "perfect security", you are welcome to do this. But not only do you need to establish that, you also need to establish the social equivalent. That is, that all business contracts are "perfectly written" and all legal proceedings are "perfectly resolved", and that the costs of all this perfection are ~essentially zero. That is the path of least resistance for your position. see also: https://news.ycombinator.com/item?id=7523186 https://news.ycombinator.com/item?id=7523186 esp sub thread https://news.ycombinator.com/item?id=7524976 https://news.ycombinator.com/item?id=7524976