Anyone else concerned about Non net-neutrality?

[Aisone]

Aside from the heated politics of this issue, it seems any de-prioritization (or non-prioritization) of our trade data packets could significantly affect aggressive short-term traders.

Trades and price changes occur in milliseconds and even slight delays could have a significant impact on busy volatile markets and fast markets.

Most if not all of the current third-party datafeeds are often inadequate during fast markets already imo because of the latency between the time of the trade and the time we receive them, coupled with the additional delay that is created by very heavy server loads during significant market volume/volatility bursts.

I'd be happy to be wrong, very relieved actually, but it seems that changes in neutrality of internet data packets could put individual traders, like most of us, at an increased disadvantage to those firms who have dedicated lines to the exchanges' feeds, as well as the co-locators, who actually have their electronic trading computers directly in exchanges to minimize latency.

Thoughts?

 

[thenewguy]

Quote from Granpa:

Aside from the heated politics of this issue, it seems any de-prioritization (or non-prioritization) of our trade data packets could significantly affect aggressive short-term traders.

Trades and price changes occur in milliseconds and even slight delays could have a significant impact on busy volatile markets and fast markets.

Most if not all of the current third-party datafeeds are often inadequate during fast markets already imo because of the latency between the time of the trade and the time we receive them, coupled with the additional delay that is created by very heavy server loads during significant market volume/volatility bursts.

I'd be happy to be wrong, very relieved actually, but it seems that changes in neutrality of internet data packets could put individual traders, like most of us, at an increased disadvantage to those firms who have dedicated lines to the exchanges' feeds, as well as the co-locators, who actually have their electronic trading computers directly in exchanges to minimize latency.

Thoughts?

Have there been recent changes in NN? New regulations or protocols by current BB providers? I haven't been keeping up to speed since this was a hot issue a while ago.

To me, this is just one of the many disadvantages that retail guys have over pro's. The pure latency aspect of direct lines is such a HUGE advantage over puclic internet lines that to me, it allows a style of trading that simply isn't possible for retailers. I don't see non-NN changing that, but if it did, it would be disasterous for many businesses as well, I would imagine.

Plus, aren't we supposed to have so much bandwidth we should be choking on it by now??

TNG

 

[Aisone]

Quote from thenewguy:

Have there been recent changes in NN? New regulations or protocols by current BB providers? I haven't been keeping up to speed since this was a hot issue a while ago.

To me, this is just one of the many disadvantages that retail guys have over pro's. The pure latency aspect of direct lines is such a HUGE advantage over puclic internet lines that to me, it allows a style of trading that simply isn't possible for retailers. I don't see non-NN changing that, but if it did, it would be disasterous for many businesses as well, I would imagine.

Plus, aren't we supposed to have so much bandwidth we should be choking on it by now??

TNG

I agree individuals can be at a big disadvantage to the pros in many ways, which is why it is such a concern that it not worsen. Realtime price data efficiency is the one constant that we all need, with little if any room for degradation.

There are claims that ISP's are already prioritizing packets in certain instances, but nothing has changed yet from the current rules requiring net-neutrality (except an FCC committee said yesterday they didn't foresee a non net-neutrality environment as a problem.)

And as I see it, the professional trading industry isn't very concerned about changes in net-neutrality because they use dedicated lines, and any increased disadvantage to others would be an increased advantage for their trading activity.

 

[nolajy]

I have been trading the futures markets for eight years. The bid ask spreads and confirmation of fills is 95 % better than it has ever been. IMagine only eight yearsa go having to phone in orders and wait to get fills from floor brokers!! The options market in futures is still in the pit. The playing field is more level now than it ever has been. I have head numerous stories of guys who traded in the pit years ago and they cannot make a dime on the screen. Anyway .. I am amusing you trade stocks; however, stocks have a level playing field as far as the tradign platforms. I think you guys should cocnern yourselves more with your trading style and technique and less with worrying about milliseconds of execution. Quite honestly, if a millisecond or two is going to make or break your trade then you should not be making that trade in the first place! !! The house edge is less now than it ever has been so if you aren't making money then it is you or your system, but do not try to say it is due to a millisecond delay in execution.

 

[thenewguy]

Quote from Granpa:

I agree individuals can be at a big disadvantage to the pros in many ways, which is why it is such a concern that it not worsen. Realtime price data efficiency is the one constant that we all need, with little if any room for degradation.

There are claims that ISP's are already prioritizing packets in certain instances, but nothing has changed yet from the current rules requiring net-neutrality (except an FCC committee said yesterday they didn't foresee a non net-neutrality environment as a problem.)

And as I see it, the professional trading industry isn't very concerned about changes in net-neutrality because they use dedicated lines, and any increased disadvantage to others would be an increased advantage for their trading activity.

I'd be worried if the gov't started regulating it, but if a company decides to traffic shape in a way that is bad for their customers, I wouldn't be too worried about that. It would suck to be their customer, but the market will adjust and they'll eventually go out of business or change their ways.

As for the pros, they have never cared about us anyway. I honestly don't believe that it would make any difference to them whether or not retail guys at home are getting a higher latency than before. Also, I would imagine some "business specific" ISP's would pop up if that were the case. They'd just have to figure out how to abide by the new non-neutral laws, if there were some.

What made you think of this, just out of curiosity?

TNG

 

[Aisone]

Quote from nolajy:

I have been trading the futures markets for eight years. The bid ask spreads and confirmation of fills is 95 % better than it has ever been. IMagine only eight yearsa go having to phone in orders and wait to get fills from floor brokers!! The options market in futures is still in the pit. The playing field is more level now than it ever has been. I have head numerous stories of guys who traded in the pit years ago and they cannot make a dime on the screen. Anyway .. I am amusing you trade stocks; however, stocks have a level playing field as far as the tradign platforms. I think you guys should cocnern yourselves more with your trading style and technique and less with worrying about milliseconds of execution. Quite honestly, if a millisecond or two is going to make or break your trade then you should not be making that trade in the first place! !! The house edge is less now than it ever has been so if you aren't making money then it is you or your system, but do not try to say it is due to a millisecond delay in execution.

I agree that the overall efficiency of markets are of course better than ever - they are more competitive, deeper, faster executions and reporting, and best of all...cheaper to execute. But price changes are also MUCH faster than they used to be even 5 years ago (muchless 2 years ago imo), which is one of the many reasons why floor traders can't compete on the same level anymore.

Milliseconds really is very important...I never said one or two, but even 50-100-200 and on up can be the difference between a fill in a fast market, and a missed trade. Anything near an additional 500ms could be disastrous in certain circumstances. Independent traders are already at a disadvantage...we already face increased latency, but any significant additional latency could be like trading with yesterday's prices at certain times.

As for the shortterm impact, If a trader is trading a few instruments that aren't highly volatile often etc, the greatest latency impact won't be as noticeable, but in stocks, fast markets happen many times everyday across an exchange, and those unstable periods can provide many trade/price opportunities, if not the best opportunities.

There is no way to quantify at this point how much any new 'de-prioritization' of trade data packets will have because its not known how much slower speeds would be than the content providers who may be paying for prioritization, but I believe its a legitimate concern.

 

[thenewguy]

Quote from Granpa:

I agree that the overall efficiency of markets are of course better than ever - they are more competitive, deeper, faster executions and reporting, and best of all...cheaper to execute. But price changes are also MUCH faster than they used to be even 5 years ago (muchless 2 years ago imo), which is one of the many reasons why floor traders can't compete on the same level anymore.

Milliseconds really is very important...I never said one or two, but even 50-100-200 and on up can be the difference between a fill in a fast market, and a missed trade. Anything near an additional 500ms could be disastrous in certain circumstances. Independent traders are already at a disadvantage...we already face increased latency, but any significant additional latency could be like trading with yesterday's prices at certain times.

As for the shortterm impact, If a trader is trading a few instruments that aren't highly volatile often etc, the greatest latency impact won't be as noticeable, but in stocks, fast markets happen many times everyday across an exchange, and those unstable periods can provide many trade/price opportunities, if not the best opportunities.

There is no way to quantify at this point how much any new 'de-prioritization' of trade data packets will have because its not known how much slower speeds would be than the content providers who may be paying for prioritization, but I believe its a legitimate concern.

On my list of retail vs pro advantages/disadvantages this one is right near the bottom. That's a major function of how I trade, however. And if I were writing ATS's and running them from home, I may be a bit more concerned, but still, we are playing from the nosebleed seats and we have to be aware of that constantly.

Commission structures and the PDT rule and so on would be the first things I tried to "level out".

TNG

 

[Aisone]

Quote from thenewguy:

I'd be worried if the gov't started regulating it, but if a company decides to traffic shape in a way that is bad for their customers, I wouldn't be too worried about that. It would suck to be their customer, but the market will adjust and they'll eventually go out of business or change their ways.

As for the pros, they have never cared about us anyway. I honestly don't believe that it would make any difference to them whether or not retail guys at home are getting a higher latency than before. Also, I would imagine some "business specific" ISP's would pop up if that were the case. They'd just have to figure out how to abide by the new non-neutral laws, if there were some.

What made you think of this, just out of curiosity?

TNG

Net-neutrality is already the written standard that Isps are bound to, and the term "deregulation" is a political catchy spin term that is a legitimate description in some regards, yet very deceiving in others.

Normally regulations are placed upon industries because of prior abuses, or obvious foreseeable concerns of potential future abuses. Every industry has regulations, and there is really no such thing as general "deregulation" in our market economy. God forbid all regulations be removed from our industry.

Major ISP's have consolidated into fewer major players in order to have a greater customer base which also conveniently limits competition. There's nothing illegal about that. However there's a case that if ISP's can charge content providers for bandwidth/packet prioritization, and penalize those that don't (which wouldn't be possible without the industry consolidation). There's lots of room for good practices as well as abuse in this area, but my main concern is: Will the outcome be a setback for independent traders.

To answer your question, I'm concerned because I've seen the markets increase exponentially in speed the last few years, and at the same time seen the impact that latency already has on being able to get to and execute potential trade opportunities on time, and I certainly don't want it to become more difficult.

 

[Aisone]

Quote from thenewguy:

On my list of retail vs pro advantages/disadvantages this one is right near the bottom. That's a major function of how I trade, however. And if I were writing ATS's and running them from home, I may be a bit more concerned, but still, we are playing from the nosebleed seats and we have to be aware of that constantly.

Commission structures and the PDT rule and so on would be the first things I tried to "level out".

TNG

I'm not a fan of either of those, particularly the pre-arranged rebates between brokers and market makers to give incentive to trade amongst themselves, and not others. That should be a violation.

 

[CHACHA420]

How to check letancy? I use command "tracert" to my broker, but result did not get thru. But my platform quotes are keep changing very speedly. I use openecry as a future broker. Here is the result.
After 14 hops (router) contineously timed out but my platform is still running and gettting quotes directly from the broker's server. I am just curious if I put orders how long it takes time to get there?

Microsoft Windows XP [Version 5.1.2600]

(C) Copyright 1985-2001 Microsoft Corp.

C:\Documents and Settings\tracert openecry.com

Tracing route to openecry.com [64.74.106.19]

over a maximum of 30 hops:

1 * * * Request timed out.
2 2 ms 1 ms 1 ms 192.168.0.1
3 4 ms 4 ms 3 ms mygateway1.ar7 [192.168.1.1]
4 12 ms 11 ms 11 ms 67.55.1.1
5 11 ms 10 ms 11 ms 66.49.255.193
6 12 ms 11 ms * t4-2.mpd01.yyz02.atlas.cogentco.com [38.99.208.9
7 11 ms 14 ms 12 ms v3493.mpd01.yyz01.atlas.cogentco.com
8 26 ms 26 ms 35 ms t7-4.mpd01.ord01.atlas.cogentco.com
9 26 ms 25 ms 26 ms vl3490.mpd01.ord03.atlas.cogentco.com [154.54.6.206]
10 28 ms 26 ms 26 ms gblx.ord03.atlas.cogentco.com [154.54.11.102]
11 144 ms 199 ms 199 ms Internap-Ken-Schmid-Chicago.ge-0-3-0.400.ar1.CHI2.gblx.net [208.48.24.186]
12 29 ms 27 ms 27 ms border6.pc1-bbnet1.chg.pnap.net [64.94.32.11]
13 26 ms 26 ms 28 ms rtsrealtime-1.border6.chg.pnap.net [64.94.34.206]
14 26 ms 27 ms 27 ms 64.74.106.5
15 * * * Request timed out.
16 * * * Request timed out.
17 * * * Request timed out.
18 * * * Request timed out.
19 * * * Request timed out.
20 * * * Request timed out.
21 * * * Request timed out.
22 * * * Request timed out.
23 * * * Request timed out.
24 * * * Request timed out.
25 * * * Request timed out.
26 * * * Request timed out.
27 * * * Request timed out.
28 * * * Request timed out.
29 * * * Request timed out.
30 * * * Request timed out.

Trace complete.

thank you in advance for your helpful input.