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Re: High frequency trading and a 4ms faster cable

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On 4/6/2014 8:05 PM, Randy Westlund wrote:
> On 2014-04-06, Hils wrote:
>> On 2014-04-06 20:44, Randy Westlund wrote:
>>> I've done some reading about this before.  HFT scares me.  We have
>>> thousands of algorithms running in NYC and Chicago, all trying to
>>> buy and sell as fast as they can to rise the waves of whatever
>>> trends they see.  The scary part is how this causes emergent
>>> behavior of a complicated system that we can never hope to
>>> understand.  There are flash crashes [1] that happen from time to
>>> time, and we don't know why.  Maybe someone's algorithm trying to
>>> create a trend?  Maybe just a race condition inherent in the
>>> interactions of the algorithms?
>>>
>>> And then we get silly things like property near the NYSE being
>>> significantly more valuable because it can ping the NYSE in 0.5 ms
>>> less time than other property in NYC.
>>>
>>> 1: http://en.wikipedia.org/wiki/Flash_Crash
>>
>> We won't see any regulation of this while law is made not democratically
>> but by a minority who, if they are not already oligarchs can easily be
>> bribed by oligarchs.
> 
> But what's the proper way to regulate this?  I don't think they're
> doing anything wrong, but it's leading to undesirable behavior.
> Regulation of HFT would be very difficult to do justly, I think.

Put a 0.1% transaction tax on every completed transaction, and the
problem would cure itself. And probably solve the national deficit in
the process.

Putting a 5s delay between bid and acceptance (or not) would probably
do the trick, too. (I'm guessing that would make it comparable to
manual floor trading.)

I don't see why either could be considered "unjust".

> 
>> Perhaps the most democratic response is to disrupt
>> the trading networks and systems by any means available.
> 
> You're not suggesting we start DDoSing them, are you?  Doesn't seem
> like a good move for the world economy.
> 

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High frequency trading and a 4ms faster cable RS Wood <rsw@therandymon.com> - 2014-04-06 19:20 +0000
  Re: High frequency trading and a 4ms faster cable Randy Westlund <Vorzakir@invalid.invalid> - 2014-04-06 19:44 +0000
    Re: High frequency trading and a 4ms faster cable Dag-Erling Smørgrav <des@des.no> - 2014-04-06 22:21 +0200
      Re: High frequency trading and a 4ms faster cable Randy Westlund <Vorzakir@invalid.invalid> - 2014-04-07 01:11 +0000
    Re: High frequency trading and a 4ms faster cable Hils <hils@saynotospam.net> - 2014-04-06 21:23 +0100
      Re: High frequency trading and a 4ms faster cable Randy Westlund <Vorzakir@invalid.invalid> - 2014-04-07 01:05 +0000
        Re: High frequency trading and a 4ms faster cable Dave Garland <dave.garland@wizinfo.com> - 2014-04-08 15:36 -0500
          Re: High frequency trading and a 4ms faster cable Randy Westlund <Vorzakir@invalid.invalid> - 2014-04-09 05:51 +0000
            Re: High frequency trading and a 4ms faster cable Dave Garland <dave.garland@wizinfo.com> - 2014-04-09 16:24 -0500
              Re: High frequency trading and a 4ms faster cable Randy Westlund <Vorzakir@invalid.invalid> - 2014-04-10 17:40 +0000
    Re: High frequency trading and a 4ms faster cable Hils <hils@saynotospam.net> - 2014-04-06 21:39 +0100
    Re: High frequency trading and a 4ms faster cable Hils <hils@saynotospam.net> - 2014-04-06 21:39 +0100
      Re: High frequency trading and a 4ms faster cable RS Wood <rsw@therandymon.com> - 2014-04-07 08:57 +0000

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