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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...manipu

by 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

tptacek 13y ago
Cancellation of a resting limit order isn't "bad faith". Everyone participating in trading on the exchange knows that orders can be cancelled. Cancellation is one of the rules of the game. This isn't a subtle point; it's so obvious that it's hard to understand why it even needs saying.
- 001sky 13y ago
  You need to whiteboard an example. You cannot say "this random piece of $foo terminology" is #anything. Because there are "other random peices of terminology" besides the ones you've heard of that might come into play. And these come into play in complex systems. And you need to define the system as well. And then go through the -N- permeutations of the system at a physical level. And then at the social level (including norms and regulations). [Again, this is just like a security analysis. You'd never accept #random_persons_problem thrown your way without context, would you?] #1 In a simple world like open-outcry, exchange-exclusive markets (not dis-similar to the 1990's) even the most basic scenario is nothing HFT intermediation today. Not only instanaeous execution but live-presence real-time surveilance and extended serial-reciprocity, etc. These are non-reproducible safe-guards {all} in HFT sceanios of ineterst. #2 "Cancellation of a resting limit order isn't "bad faith"" even this concept in plain english is wrong. I may act in bad faith deliberately. You can't rule that out. You can't make indference about my intentions. You can only hope that the consequences are not a problem. If the rules are perfectly written and enforced, &tc. #3 The consequences of #2 depend upon the context of #1, but fleshed out in full detail. Its possible to design systems where the <consequences> of bad faith are greater and lesser problem/s. Totally fair point. And if you assume a perfect world, you asymptoically get to a place where "you don't need to worry about it". Alternatively, you can design a world that goes in the other directin. #4 "Cancellation is one of the rules of the game." Rules everywhere are grey. And this is buy only a single one of many that interact together. Read the second link in my earlier note. This is as much technical issue. Unless you are at that level, everything else is completely trivial. Anyways, enjoy the rest of the book.
  - tptacek 13y ago
    This comment seems after a casual read to have been written intentionally to avoid introducing any testable assertions. You're essentially litigating not just all of electronic trading, but, from what I can tell, much of trading, period.

by 001sky 13y ago

tptacek 13y ago

Cancellation of a resting limit order isn't "bad faith". Everyone participating in trading on the exchange knows that orders can be cancelled. Cancellation is one of the rules of the game. This isn't a subtle point; it's so obvious that it's hard to understand why it even needs saying.

001sky 13y ago
You need to whiteboard an example. You cannot say "this random piece of $foo terminology" is #anything. Because there are "other random peices of terminology" besides the ones you've heard of that might come into play. And these come into play in complex systems. And you need to define the system as well. And then go through the -N- permeutations of the system at a physical level. And then at the social level (including norms and regulations). [Again, this is just like a security analysis. You'd never accept #random_persons_problem thrown your way without context, would you?] #1 In a simple world like open-outcry, exchange-exclusive markets (not dis-similar to the 1990's) even the most basic scenario is nothing HFT intermediation today. Not only instanaeous execution but live-presence real-time surveilance and extended serial-reciprocity, etc. These are non-reproducible safe-guards {all} in HFT sceanios of ineterst. #2 "Cancellation of a resting limit order isn't "bad faith"" even this concept in plain english is wrong. I may act in bad faith deliberately. You can't rule that out. You can't make indference about my intentions. You can only hope that the consequences are not a problem. If the rules are perfectly written and enforced, &tc. #3 The consequences of #2 depend upon the context of #1, but fleshed out in full detail. Its possible to design systems where the <consequences> of bad faith are greater and lesser problem/s. Totally fair point. And if you assume a perfect world, you asymptoically get to a place where "you don't need to worry about it". Alternatively, you can design a world that goes in the other directin. #4 "Cancellation is one of the rules of the game." Rules everywhere are grey. And this is buy only a single one of many that interact together. Read the second link in my earlier note. This is as much technical issue. Unless you are at that level, everything else is completely trivial. Anyways, enjoy the rest of the book.
- tptacek 13y ago
  This comment seems after a casual read to have been written intentionally to avoid introducing any testable assertions. You're essentially litigating not just all of electronic trading, but, from what I can tell, much of trading, period.