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Laser network between NYSE and Nasdaq will allow more HFT profits

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  Laser network between NYSE and Nasdaq will allow more HFT profits cykros@devio.us - 2014-02-14 19:30 +0000
    Re: Laser network between NYSE and Nasdaq will allow more HFT profits cykros@devio.us - 2014-02-14 19:33 +0000
      Re: Laser network between NYSE and Nasdaq will allow more HFT profits wjwlsn <ibillwilson@gmail.com> - 2014-02-14 14:59 -0800
        Re: Laser network between NYSE and Nasdaq will allow more HFT profits deepmagicbeginshere@gmail.com - 2014-02-14 19:43 -0800
          Re: Laser network between NYSE and Nasdaq will allow more HFT profits Atom Cogswell <m8r-uu8mmb@mailinator.com> - 2014-02-15 11:17 -0700
    Re: Laser network between NYSE and Nasdaq will allow more HFT profits RS Wood <rsw@therandymon.com> - 2014-02-15 20:32 +0000
    It's not like Slashdot here :-( "q.kontinuum" <achsis_of_elvis@yahoo.co.uk> - 2014-02-16 15:26 +0100

#424 — Laser network between NYSE and Nasdaq will allow more HFT profits

cykros writes: High Frequency Trading (HFT) is getting an upgrade,
as Anova, a company specializing in low latency networks, is on 
course to finish a new high speed laser network between the NYSE
and NASDAQ.  Improvements over existing microwave networks expected
to be a matter of nanoseconds, which nonetheless will spell major 
profits for HFT firms.  HFT has receive a large amount of criticism
due to it being seen as generally adding volatility to the market
while not adding anything of value.

http://www.extremetech.com/extreme/176551-new-laser-network-between-nyse-and-nasdaq-will-allow-high-frequency-traders-to-make-even-more-money

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#425

cykros@devio.us wrote:
> cykros writes: High Frequency Trading (HFT) is getting an upgrade,
> as Anova, a company specializing in low latency networks, is on 
> course to finish a new high speed laser network between the NYSE
> and NASDAQ.  Improvements over existing microwave networks expected
> to be a matter of nanoseconds, which nonetheless will spell major 
> profits for HFT firms.  HFT has receive a large amount of criticism
> due to it being seen as generally adding volatility to the market
> while not adding anything of value.
> 
> http://www.extremetech.com/extreme/176551-new-laser-network-between-nyse-and-nasdaq-will-allow-high-frequency-traders-to-make-even-more-money

So, following up to your own article may be poor form, but I didn't 
want to editorialize the summary, so I saved it for the followup.

Generally, this is probably a bad thing when it comes to the stock
market application it's getting, but it'd be interesting to see
what other applications this laser networking technology may be
able to be used in after being pioneered by Wall St.  I'm 
particularly curious, though, as to how susceptible it is to 
being interrupted, or even tampered with.  Seems to me with a
hobbyist UAV, depending on where exactly the laser is going,
some pretty costly disturbances could be caused...

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#429

On Friday, February 14, 2014 2:33:46 PM UTC-5, cyk...@devio.us wrote:
> Seems to me with a hobbyist UAV, depending on where exactly the laser is going, some pretty costly disturbances could be caused...

As someone that enjoys flying hobbyist UAVs (both planes and multirotors), I had a similar thought... but I can also imagine many other things that could be a problem. I actually read the article, and while it mentions "adaptive optics" that make the system tolerant of weather conditions, I have to wonder how it would handle really heavy weather (heavy rain, snow, fog, etc). And what about more momentary interruptions, like birds, bats, balloons...

The hobbyist UAV may well be the worst potential blockage, though. A competently stabilized hexa- or octo-copter with position and altitude lock could hover in position for a considerable amount of time. It wouldn't cost that much ($1000) to build or buy a system capable of doing this reliably, and that includes long range control, real-time video, autopilot with waypoint programming, GPS/barometer/compass, etc.

... not that I'd ever do it, hahaha. (Rubbing hands together supervillain-style.)

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#430

If I were building that, it would be bonded to the existing microwave system, so any interruption would cause it to fail back to the microwave, which is nanoseconds slower.

I also take issue with the politically palatable  assertion that hft or arbitrage in general CAUSES volatility.  It seems to that it detects short wavelength volatility and by absorbing that volatility in the form of profit , it removes the volatility from the market.  This is much like a low-pass filter inductor , which warms  up, taking energy from the voltage  swings, and in the prices process removing those voltage swings  from the system.  Of course, IF a HFT trader held a significant percentage of the stock in a small company, and IF they sold it all at once, that would cause volatility  (much like the flyback voltage from the inductor), but  that's a very rare case indeed.

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#437

On 2/14/2014 8:43 PM, deepmagicbeginshere@gmail.com wrote:
> If I were building that, it would be bonded to the existing microwave system, so any interruption would cause it to fail back to the microwave, which is nanoseconds slower.

So... Quadracopters with chaff canisters then?

My point of view: HFT provides liquidity. That's a good thing, since
each buyer must find a seller, and the other way around. The side effect
of liquidity is volatility. That's going to be unavoidable.

The 'service' of providing liquidity is worth something to traders in a
general sense, since trades can be made quickly, but the value
proposition is this: They're basically playing a latency game with fast
networks and finely tuned algorithms, and siphoning heaps of wealth away
in the process, without providing any measure of productivity. I don't
see sustainability in this practice.

Following the low pass filter analogy, what happens when these firms
decide they aren't happy with the profit, and they turn up the knob?

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#450

On 2014-02-14, cykros@devio.us <cykros@devio.us> wrote:
> cykros writes: High Frequency Trading (HFT) is getting an upgrade, as
> Anova, a company specializing in low latency networks, is on course to
> finish a new high speed laser network between the NYSE and NASDAQ.
> Improvements over existing microwave networks expected to be a matter
> of nanoseconds, which nonetheless will spell major profits for HFT
> firms.  HFT has receive a large amount of criticism due to it being
> seen as generally adding volatility to the market while not adding
> anything of value.
>

I am attracted intellectually by the idea of a low latency network built
over laser.  But the idea that this technology is going to be used to
further the existence of a practice that has at least once threatened to
bring the economy of the Western world to its knees sickens me.

A lot of people are saying HFT should be shut the hell down immediately,
and I'm one of them.  How about if we hack the network and use the laser
to fry this bad idea?  (I'm reminded of that old 80s movie Real Genius
where they divert the laser to cook a big bag of popcorn).

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#460 — It's not like Slashdot here :-(

On 2014-02-14, cykros@devio.us <cykros@devio.us> wrote:
> cykros writes: High Frequency Trading (HFT) is getting an upgrade,
> as Anova, a company specializing in low latency networks, is on 
> course to finish a new high speed laser network between the NYSE
> and NASDAQ. 

An article mentioning lasers and sharks (sort of), and still no
comment about sharks wearing head-mounted lasers :-(


-- 
Trolling is a art!

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