Reply to: NYSE head: speed isn't always good

[Mich the Tester]

Is this chappy trying to say that it's not necessarily a good thing if trades that risk bigger sums of money than some of the parties can survive can be executed before those parties have been able to think about what they're doing?

If so, I'm inclined to agree with him.

[eek]

The trading systems I have worked on have all had limits on the transactions (per counter party, per trader, per location etc.).

This type of problem already has a standard solution. Knights Capital were negligent to not have this safeguard in place and paid the price (literally).

Am I missing something?

Yes the fact they missed adding those safeguards to the system as that was extra work.

[MyUserName]

The trading systems I have worked on have all had limits on the transactions (per counter party, per trader, per location etc.).

This type of problem already has a standard solution. Knights Capital were negligent to not have this safeguard in place and paid the price (literally).

Am I missing something?

[SupremeSpod]

because then profit becomes a function of technology.


the winner of WOW becomes the one with the fastest connection


the kid best at football is the one wearing the latest man U rooney kit

If you provide the fastest technology then all will have to buy or be left behind, it's "MAD"

Spod - In "Making Hay while the sun shines" mode!

[EternalOptimist]

How so?

The Atlantic Telegraph Cable was used to great effect in trading in the mid to late 18th Century.

because then profit becomes a function of technology.


the winner of WOW becomes the one with the fastest connection


the kid best at football is the one wearing the latest man U rooney kit

[SupremeSpod]

I dont know much about the ice cream market, and I dont know much about HST, but if people are making money BECAUSE of the speed, then I can see that being a big problem

How so?

The Atlantic Telegraph Cable was used to great effect in trading in the mid to late 19th Century.

[doodab]

Nothing, meant to quote ATW's reply re long term share ownership.

Ah OK.

[escapeUK]

What has that got to do with eliminating market distortion due to HFT?

Nothing, meant to quote ATW's reply re long term share ownership.

[EternalOptimist]

I dont know much about the ice cream market, and I dont know much about HST, but if people are making money BECAUSE of the speed, then I can see that being a big problem

[doodab]

But anyone who kept shares long term the last 10 years will have made pretty much nothing. MSFT, CSCO about the same, DELL less today. Banking horrible losses. Obviously there are some stars out there like Google and Apple.

What has that got to do with eliminating market distortion due to HFT?

[escapeUK]

I do think something needs to be done, simply because the quest for ultra low execution times and arbitrage over a period of nanoseconds biases the market in favour of the well to do. I would work around this not by imposing a delay but by imposing a jitter on the connections to the exchanges such that any gains to be had from jiggery pokering were statistically insignificant.

But anyone who kept shares long term the last 10 years will have made pretty much nothing. MSFT, CSCO about the same, DELL less today. Banking horrible losses. Obviously there are some stars out there like Google and Apple.

Its a complete casino tbh. My gold is doing much better than any shares I ever had, tax free too.

[doodab]

I do think something needs to be done, simply because the quest for ultra low execution times and arbitrage over a period of nanoseconds biases the market in favour of the well to do. I would work around this not by imposing a delay but by imposing a jitter on the connections to the exchanges such that any gains to be had from jiggery pokering were statistically insignificant.

[AtW]

I don't think I'd agree with that.

I would not expect you to agree with that ice cream analogy (because it isn't relevant), however for dangerous things such as gun sales for example it would be reasonable to expect some delay between buy/sell decisions.

Tax system in US actually encourages long term share ownership with lower CGT on those (15% I think) and it was good here with Taper Relief until cretins Darling/Brown removed it. Then even bigger idiot Osborne puts CGT up to 28%.

[KentPhilip]

If nobody put a sell order then you won't be buying.

A sell order gets 24 hour delay only after that point it can be bought.

Problem solved, even though it will put some dirty spekulants out of business.

It's a very heavy loss, but I think the society as a whole can take it.

OK thanks for clarifying that.
So what you are proposing, to continue my ice cream analogy, is that if there are ice cream vans on the beach people should be allowed to buy from them, but the council should put limits on whether they are allowed to trade there.

I don't think I'd agree with that.

[AtW]

Sub 5us, and only a prototype...

I hope you'll repent before it's too late you dirty spekulant!