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(CNBC)   Skynet tried to steal your money last week   (cnbc.com) divider line 13
    More: Scary, high-frequency trading, money-making, arbitrages, algorithms, David Greenberg  
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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»



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Archived thread
2012-10-09 07:08:53 AM  
6 votes:
The more I learn about automated trading, the more I support a $0.03 tax per transaction on the major financial markets.
ZAZ [TotalFark]
2012-10-09 08:55:56 AM  
3 votes:
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 11:55:05 AM  
2 votes:
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 09:38:41 AM  
2 votes:
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 09:34:47 AM  
2 votes:
If only we had had people who tried to warn us that electronic trading is a very dangerous practice and should not be allowed...
2012-10-10 12:47:09 AM  
1 votes:

Alonjar: True story: a relative of mine works for the SEC. The agency spent a lot of time and money building a new super computer to track and monitor market manipulation by HFT machines. The SEC budget is completely controlled by washington... and they killed the budget for the HFT tracking specifically. The kicker? The SEC is self funded... they bring in more revenue than they cost through fines and fees.

It was entirely a move by someone powerful in washington who wanted to shut down the program so their cronie buddues could continue siphoning money from the markets. My relatives boss resigned over the matter because he was so pissed.


We are in dark times indeed. Duplicity and cronyism has always run roughshod over financial markets (just read anything on Morgan's day) but the financial weapons of mass destruction are reaching potency levels that are as game-changing as the A-bomb.
2012-10-09 11:32:01 PM  
1 votes:

Alonjar: drdonks: In David Cay Johnston's book Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense and Stick You With The Bil he talks about a company that was based in Omaha or some other Midwestern city that wound up moving to New York because they were losing out on trades because their high powered computers couldn't keep pace with the east coast traders...who were conducting trades hundredths of a second faster than they could because of the distance. As the author puts it (paraphrased) "the speed of light wasn't fast enough for them to maximize profits."

Its more complicated than that... and more messed up. There are different tiers of pipes going into the markets... for people who are willing to pay the price, you can buy a higher priority tier and have your servers sitting next to the markets systems. The difference in speed isnt just speed of execution... if you are on the top tier, your computers can actually see new orders coming down the pipe... and you can alter your orders after you see theirs, but before they are processed. So machines blatantly walk up the price etc.. you place a sell order for $1.00 per share.. then as a buy order comes in for the $1.00 price, you alter your order to $1.01. The buyer then alters his order to match at $1.01 price, but again, you see it coming and alter your order to $1.02. You do this process automatically until you find the buyers price ceiling.

Do this over and over hundreds of times a second all over the market... doing the inverse for your own buys, and you end up with a price spread that you can profit off all day long.


... How is that in any way, shape, or form legal?

Wouldn't that be insider trading, if it were done by a human?
2012-10-09 10:16:38 AM  
1 votes:

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 10:04:21 AM  
1 votes:

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 09:51:36 AM  
1 votes:
So, there might be a downside to being a culture of money changers?

Who knew?
2012-10-09 09:51:31 AM  
1 votes:
You'd think at some point they'd ban the use of these bots
2012-10-09 09:42:51 AM  
1 votes:
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 09:36:58 AM  
1 votes:
Joke's on you, I ain't got any!
 
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