5 ms·

About time. It's total cheating and should never have been allowed. http://bellringer187868.wordpress.com/2009/07/25/the-bingo-bin/ http://bellringer187868.wor

• quant18 17y ago
  "Then we divide all the incoming orders into discrete time chunks called quantums. All the orders in one quantum will be processed independently of the rest of the world and before the next quantum is processed." Taiwan's stock and futures exchanges have a vaguely similar trading mechanism. This isn't really well-discussed on the internet in English. Best I could find at short notice was these papers (first one free, second one not): http://www.kfunigraz.ac.at/sor/Downloads/SS2009/ExpVerfahren/Paper1/Literatur%20Exp.%20Verfahren/Comerton_Rydge.pdf http://www.kfunigraz.ac.at/sor/Downloads/SS2009/ExpVerfahren... http://www3.interscience.wiley.com/journal/116327547/abstract http://www3.interscience.wiley.com/journal/116327547/abstrac... Basically, instead of having continuous trading (which could mean huge amounts of market data every second), they just do 30-second auctions all day long. You get an order book update, send in your orders, and they figure out who matched whom 30 seconds later. At which point they send out the next order book update, consisting of all the orders which didn't match in the last auction. Time priority still applies within the 30-second chunks. So if you have a trading algorithm, it only has to wake up once every 30 seconds ... but when it does, it has to be fast. (However, time priority doesn't apply in the opening auction --- the priority for orders at any given price is randomised and has nothing to do with who got their orders in first.) Of course the little local brokers loved this mechanism, and the big foreign banks all hated it (and probably lobbied against it behind the scenes). Maybe they lobbied so hard that they don't have this mechanism anymore; I've been out of the industry for a few years now so I'm way behind the times ...
• gaius 17y ago
  Well no because this is how exchanges have always worked. You can look anywhere and see this, TV, the web, stock prices are delayed by 20 minutes. Market participants get them without this delay and no-one's ever had a problem with this. So the principle of paying a fee in order to get faster access to pricing is well-established. This is just taking it to the next level. Secondly, anyone who wants to can do this, they just need to pay the fee. There is zero evidence of a cartel.
  • jhancock 17y ago
    You don't need evidence of a cartel, monopoly, or cheating to decide that society/economy may be better off if the rules were changed. I have no evidence that things would be better if the rules were changed but some people that know better than me see value in taking a closer look to see if this might be the case.
• andylei 17y ago
  > The programs can gauge market response and, using pre-programmed manoeuvres, called algos (for algorithms), catch the demand before the public (that’s YOU), grab lots of it cheap, enter and cancel hundreds of small orders in order to find out the public’s limit for a stock’s price and dump all it’s holdings to them at a penny below their limit, but above what the computer paid for it, for a small ($10,000, say) profit, in a matter of seconds. This isn't flash trading, this is just high frequency trading. All the stuff mentioned in this paragraph about "cheating" has nothing at all to do with flash orders. bellringer seems to suggest that high frequency trading is "cheating". This argument that guys with faster computers and better connections are beating at home traders is nonsensical. If I tried making cars at home in my garage, of course Toyota is going to beat me. They have state of the art factories, trained engineers, and years of experience. Toyota isn't cheating. Similarly, Goldman Sachs, along with lots of smaller guys, has huge computing clusters, blazingly fast and connections and they're going to beat you, a guy with a laptop at home. But it's not cheating.
  • known 17y ago
    How is it different from http://www.sec.gov/answers/insider.htm http://www.sec.gov/answers/insider.htm
    • deleted 17y ago
      [deleted]
  • lsd5you 17y ago
    Do you really consider that a useful analogy? Cheap cars are useful. A super liquid stockmarket is a zero sum game in which everyone is encouraged to participate but a few sharks basically have extra cards. Its really not obvious why such a responsive market is necessary, it is simply said to be a good thing and a progression, yet it moves at speeds that clearly do not reflect the underlying fundamentals.
    • sp332 17y ago
      Why do you say the stock market is zero-sum? People put money in & take it out all the time.