If you can read this, either the style sheet didn't load or you have an older browser that doesn't support style sheets. Try clearing your browser cache and refreshing the page.

(CNBC)   Skynet tried to steal your money last week   (cnbc.com) divider line 60
    More: Scary, high-frequency trading, money-making, arbitrages, algorithms, David Greenberg  
•       •       •

14483 clicks; posted to Main » on 09 Oct 2012 at 9:29 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



60 Comments   (+0 »)
   
View Voting Results: Smartest and Funniest

Archived thread

First | « | 1 | 2 | » | Last | Show all
 
2012-10-09 07:08:53 AM  
The more I learn about automated trading, the more I support a $0.03 tax per transaction on the major financial markets.
 
2012-10-09 07:28:21 AM  
Well, that's not at all unsettling.
 
ZAZ [TotalFark]
2012-10-09 08:55:56 AM  
I feel a tax on order-stuffing is what the markets need at this point

I've previously supported a higher transaction tax. Now I'll recommend a tax on placing an order instead of filling an order.

I also support adding latency for everybody, say by settling trades in 1 second batches, so creating fake volume won't be effective.
 
2012-10-09 09:34:47 AM  
If only we had had people who tried to warn us that electronic trading is a very dangerous practice and should not be allowed...
 
2012-10-09 09:36:25 AM  
What could possibly go wrong? oops *crash*
 
2012-10-09 09:36:58 AM  
Joke's on you, I ain't got any!
 
2012-10-09 09:37:13 AM  
FTA: "The motive of the algorithm is still unclear."
 
2012-10-09 09:38:13 AM  
Everytime I hear about this, I keep wondering what James Bond wants with all of my money...
 
2012-10-09 09:38:26 AM  

Gonz: The more I learn about automated trading, the more I support a $0.03 tax per transaction on the major financial markets.


But the complaint now will be that you'll not just destroy a few businesses but a whole industry. They already have a lot of money and will fight it, probably successfully.
 
2012-10-09 09:38:31 AM  

Gaseous Anomaly: FTA: "The motive of the algorithm is still unclear."


Maybe the worlds largest DDoS?

Crash and burn, Baby!
 
2012-10-09 09:38:41 AM  
This is why the theory of the high holy market regulating itself fails, there's always going to be some asshat trying to game the system.
 
2012-10-09 09:39:55 AM  

Another Government Employee: Gaseous Anomaly: FTA: "The motive of the algorithm is still unclear."

Maybe the worlds largest DDoS?

Crash and burn, Baby!


HFT servers signing up for Fight Club? Great...
 
2012-10-09 09:41:41 AM  

pag1107: This is why the theory of the high holy market regulating itself fails, there's always going to be some asshat JOB CREATOR trying to game the system.


FTFY
 
2012-10-09 09:42:51 AM  
Long term, I think it would be the best thing for the country if the economy were to completely collapse. It'd be hell in the short term though. People would die. Still, I think it would be worth it.

/Hack on, dudes. Hack on.
 
2012-10-09 09:44:00 AM  
www.cyberpunkreview.com

BZZZZT! I've already done that.
 
2012-10-09 09:46:41 AM  
"Just goes to show you how just one person can have such an outsized impact on the market," said Eric Hunsader, head of Nanex and the No. 1 detector of trading anomalies watching Wall Street today. "Exchanges are just not monitoring it."

Hunsader's sonar picked up that this was a single high-frequency trader after seeing the program's pattern (200 fake quotes, then 400, then 1,000) repeated over and over. Also, it was being routed from the same place, the Nasdaq


Who writes this shiat?
 
2012-10-09 09:49:54 AM  
So long, 401k. I hardly knew you.
 
2012-10-09 09:50:20 AM  
"I feel a tax on order-stuffing is what the markets need at this point," said David Greenberg of Greenberg Capital. "This will cut down on the number of erroneous bids and offers placed into the market at any given time and should help stabilize the trading environment."



They should do that at the drive up windows in America. And you should have to stand on scales before ordering.

I'm sorry, according to your BMI, you may have a salad, no dressing, and an ice water.
 
2012-10-09 09:51:10 AM  

Balchinian: Long term, I think it would be the best thing for the country if the economy were to completely collapse. It'd be hell in the short term though. People would die. Still, I think it would be worth it.

/Hack on, dudes. Hack on.


Wouldn't bother the Amish.
Or Vermont.
 
2012-10-09 09:51:20 AM  

vudukungfu: "I feel a tax on order-stuffing is what the markets need at this point," said David Greenberg of Greenberg Capital. "This will cut down on the number of erroneous bids and offers placed into the market at any given time and should help stabilize the trading environment."



They should do that at the drive up windows in America. And you should have to stand on scales before ordering.

I'm sorry, according to your BMI, you may have a salad, no dressing, and an ice water.


Fat-free ice?
 
2012-10-09 09:51:31 AM  
You'd think at some point they'd ban the use of these bots
 
2012-10-09 09:51:36 AM  
So, there might be a downside to being a culture of money changers?

Who knew?
 
2012-10-09 09:51:48 AM  

Crudbucket: Joke's on you, I ain't got any!


You beat me to making this exact joke.

Also, although this is a bit of a stretch, I'm surprised at the lack of Office Space references so far.
 
2012-10-09 09:53:13 AM  

dj_spanmaster: Gonz: The more I learn about automated trading, the more I support a $0.03 tax per transaction on the major financial markets.

But the complaint now will be that you'll not just destroy a few businesses but a whole industry. They already have a lot of money and will fight it, probably successfully.


I think the issue here is more that the algo is actually can clog or push the prices without even doing a trade... not sure how it did 4% of activity without executing a single trade but dont think the $0.03 tax would in anyway both this, there had to be a way to charge on the bandwidth or something if you're sending that many quotes? I would think the NASDAQ would have some rules already in place for this?
 
2012-10-09 09:53:53 AM  
It's like taking a penny out of the tray
i130.photobucket.com
a couple hundred million times
 
2012-10-09 09:55:17 AM  

dj_spanmaster: Gonz: The more I learn about automated trading, the more I support a $0.03 tax per transaction on the major financial markets.

But the complaint now will be that you'll not just destroy a few businesses but a whole industry. They already have a lot of money and will fight it, probably successfully.


Perhaps we can do without this particular industry.

It may be a short term loss of jobs in the sector, but it would equalize and stabilize existing markets that are currently being exploited.

Think of it as a tax on gold farmers.

/When the hell did real life start looking like a video game?
//When the hell did high frequency traders start looking practicing tactics similar to farking Goonswarm?
 
2012-10-09 09:56:48 AM  

ginandbacon: Well, that's not at all unsettling.


So either terrorists are trying to attack and they caught it or more likely, someone is promoting their new monitoring software for stock trades.
 
2012-10-09 10:04:21 AM  

Gaseous Anomaly: FTA: "The motive of the algorithm is still unclear."


Probing the enemies defences with harassing fire before the main assault. Skynet adjusting algorithms. Nearly ready.
 
2012-10-09 10:08:18 AM  

When the shiat goes down it's gonna be fun to watch. From my own selfish, non-stock owning, reasonably poor person, pass the popcorn PoV. Unrest and food riots notwithstanding.

Surely it's gonna go down one day soon, with all this HFT carry-on?

Not a fan of conspiracy theories, but the Securities and Exchange Commission's Fat Finger Crash findings reek of a hastily cobbled-together sham of an excuse.

The Chicago Mutual Exchange called bullshiat on the "accidental $75 billion trade" excuse at one stage. Not sure what the current official positions is.

Futures and options markets are hedging and risk transfer markets. The report references a series of bona fide hedging transactions, totaling 75,000 contracts, entered into by an institutional asset manager to hedge a portion of the risk in its $75 billion investment portfolio in response to global economic events and the fundamentally deteriorating market conditions that day. The 75,000 contracts represented 1.3% of the total E-Mini S&P 500 volume of 5.7 million contracts on May 6 and less than 9% of the volume during the time period in which the orders were executed. The prevailing market sentiment was evident well before these orders were placed, and the orders, as well as the manner in which they were entered, were both legitimate and consistent with market practices. These hedging orders were entered in relatively small quantities and in a manner designed to dynamically adapt to market liquidity by participating in a target percentage of 9% of the volume executed in the market. As a result of the significant volumes traded in the market, the hedge was completed in approximately twenty minutes, with more than half of the participant's volume executed as the market rallied - not as the market declined. Additionally, the aggregate size of this participant's orders was not known to other market participants. Additionally, the most precipitous period of market decline in the E-Mini S&P 500 futures on May 6 occurred during the 3½ minute period immediately preceding the market bottom that was established at 13:45:28. During that period, the participant hedging its portfolio represented less than 5% of the total volume of sales in the market.


In summary: "Bullshiat excuse from the SEC."

Meh. Maybe automatic trading halts will be enough protection.

i50.tinypic.com
// hastily cobbled-together sham
 
2012-10-09 10:11:29 AM  
They don't require a login and password to make these sorts of trades? You actually think they didn't know this was going on? Who in their right mind would have their money in the United States stock market (or hell, the world's major stock markets) right now? See, that is why I'm not worried about the Estate Tax. I know my parents are going to lose everything but their houses in the next 10 years.
 
2012-10-09 10:14:34 AM  
Regulators are trying to see how they can rein in the practice, which accounts for 70 percent of trading each day, without slowing down progress and profits for Wall Street and the U.S. exchanges.

It's okay, you can slow down progress and profits. The rich get richer and the poor get kids.
Who'd a thought that I would be in favor of stability?
 
2012-10-09 10:16:23 AM  
Bobo_Spiewack: i48.tinypic.com

BZZZZT! I've already done that.
~
~
I was surprised how much I enjoyed that movie. I even tried hard to hate it while I was watching it, to no avail.

"The world isn't run by weapons anymore, or energy, or money. It's run by little ones and zeroes, little bits of data. It's all just electrons!"
-Cosmo on another one of his rants telling Martin Bishop what tiiime it is.
 
2012-10-09 10:16:38 AM  

dj_spanmaster: But the complaint now will be that you'll not just destroy a few businesses but a whole industry. They already have a lot of money and will fight it, probably successfully.


And that is precisely what is wrong with politics in this country.

"The good of the rich outweigh the good of the many."

blastr.com
 
2012-10-09 10:21:42 AM  
Relax, Bawney Fwank and Chris Dodd have totally got this covered.
 
2012-10-09 10:33:03 AM  
Random Question:

Since automatic trading is by far and away the closest thing to come close to an "Efficient" Market, why is this unsettling? This should be an economists paradise!

Oh. 5% of trades being set up then denied by a single Rational investment program affecting markets prices without actively engaging? Oh. Not so efficient again.

Sorry, carry on. (I have some very unusual bitterness about finance econmics).
 
2012-10-09 11:11:41 AM  

Big Ramifications: Not a fan of conspiracy theories, but the Securities and Exchange Commission's Fat Finger Crash findings reek of a hastily cobbled-together sham of an excuse.


To put it as nicely as I can, anyone who still believes that there is any legitimacy to the stock market is a complete farking moron. I was astonished that they went and blatantly did the ol' Ctrl-Z to the stock market.

What do I have to do to get an "undo" on trades that turned out unfavorably for me?
 
2012-10-09 11:25:00 AM  

Another Government Employee: Gaseous Anomaly: FTA: "The motive of the algorithm is still unclear."

Maybe the worlds largest DDoS?

Crash and burn, Baby!


Someone's trying to make Die Hard 4's "Fire Sale" a reality?
 
2012-10-09 11:27:58 AM  

Eatin' Queer Fetuses for Jesus: They don't require a login and password to make these sorts of trades?


No, they don't because it's far less secure that way. Typically, the automated systems use a password-protected client certificate on the systems to negotiate a secure connection. If it was a standard "username and password" type of system, those credentials would have to be stored on the system in some manner, making them more vulnerable to theft if the hardware was compromised. With the cert, you have a limited number of people with the password, and the cert won't decrypt without it; if you steal the encrypted cert, it does you no good without the password.

It's not perfect, but its generally more secure.
 
2012-10-09 11:32:19 AM  
Hunsader warned that regulators better do something fast, speculating that this single program could have led to something very bad if big news broke, or if a sell-off occurred and one entity was hogging this much of the system.

www.daltonstate.edu

So if one person, or one party in one country, can time their bandwidth-hogging automated trading activity with some disaster that affects the economy, they should be able to profit very well. It's a good thing there aren't people or parties who can coordinate such things.
 
2012-10-09 11:33:46 AM  

Gonz: The more I learn about automated trading, the more I support a $0.03 tax per transaction on the major financial markets.


too high. that would amount to a tax of at least $180 million a day on the US finance industry. that would send trading activity (and a farkload of jobs) overseas in a heartbeat. it would also hurt pension funds in a big way.

the only winners? London, Singapore, and Switzerland.

the EU is proposing a .01% to .1% tax on transactions (depending on type). that's far more manageable.

Link
 
2012-10-09 11:55:05 AM  
Wired wrote about this very topic recently.

Generally speaking, someone will always try to game the system. If you're not the one gaming the system, you're being gamed.
 
2012-10-09 11:56:26 AM  
This has in fact been going on for years. As anyone who follows market events like this will remember the socalled "Algo wars" that began at the end of 90's.

This is all very fascinating stuff. I feel that this allong with some other factors in play will bring a game change to the markets. For better or worse, should be pretty interesting.

Kinda wish I had my own position in the game a while ago. I have longed for the day of capitalizing from market mania and all around mass-stupidity
 
ZAZ [TotalFark]
2012-10-09 12:03:11 PM  

Quoting dj_spanmaster's link:

By some estimates, 90 percent of quotes on the major exchanges are canceled before execution. Many of them were never meant to be executed; they are there to test the market, to confuse or subvert competing algorithms, or to slow trading in a stock by clogging the system-a practice known as quote stuffing. It may even be a different stock, but one whose trades are handled on the same server. On the Internet, this is called a denial-of-service attack, and it's a crime. Among quants, it's considered at most bad manners.
 
2012-10-09 12:05:02 PM  
Superman III
 
2012-10-09 12:13:54 PM  
I know what happened...
www.cinemaspy.com
 
2012-10-09 12:39:58 PM  
They need to accumulate and execute all trades at regular intervals (say every 5 seconds). All orders should remain dark until executed.

That would stop this noise real quick and even the playing field for those who cannot afford high-speed connections and supercomputers.
 
2012-10-09 12:52:40 PM  
I think I'll cash out my 401K and fark the penalties. at least I won't lose it all.
 
2012-10-09 03:25:11 PM  

nmemkha: All orders should remain dark until executed.


But...matching...how...
 
2012-10-09 03:40:02 PM  
Do they not know who initiated the trades? If not, why don't they know?
 
2012-10-09 05:55:18 PM  
So hey, can we start a 'new' stock market that does not allow these automated trades and super computers? We could call it 'new stock market' people only
 
Displayed 50 of 60 comments

First | « | 1 | 2 | » | Last | Show all

View Voting Results: Smartest and Funniest


This thread is archived, and closed to new comments.

Continue Farking
Submit a Link »
On Twitter





In Other Media


  1. Links are submitted by members of the Fark community.

  2. When community members submit a link, they also write a custom headline for the story.

  3. Other Farkers comment on the links. This is the number of comments. Click here to read them.

  4. Click here to submit a link.

Report