What do "excess" cancel orders have to do with tiered infrastructure pricing? Supply and demand, my friend. I assure you, i could flood the market with cancel orders from the other side of the globe, and I could spoof with retail-level latencies (I'd have to go about it differently). I live on the west coast, would it be reasonable for me to demand that people living in Chicago should have to slow down to accommodate my trading?
HFT at the CME - rigged to those that can pay
- Thread starter nitro
- Start date
What do "excess" cancel orders have to do with tiered infrastructure pricing? Supply and demand, my friend. I assure you, i could flood the market with cancel orders from the other side of the globe, and I could spoof with retail-level latencies (I'd have to go about it differently). I live on the west coast, would it be reasonable for me to demand that people living in Chicago should have to slow down to accommodate my trading?
IMO this is not latency-arb because there's no alternate book from which to front run things on. It's not like the equities market where HFT can front run via direct feeds vs SIP. There's only one book here. At most the faster guys may be able to out arb each other in pure arb plays like cross-exchange spreads and cross product correlation (ES vs NQ vs YM, etc), but there's notning new about that. Even if CME didn't offer these various tiers it would simply be a matter of who could be the absolute closest to the exchange because transit latency is not controllable or enforceable.
Now if they were offering tiers where HFT saw orders before they even hit the book then yes people should be absolutely flipping out about that because it would be illegal. I know there's atleast one present lawsuit that is accusing them of it.
Now if they were offering tiers where HFT saw orders before they even hit the book then yes people should be absolutely flipping out about that because it would be illegal. I know there's atleast one present lawsuit that is accusing them of it.
You can run a lot of servers off a single g link. So there's not much purpose in getting your own dedicated one. So, you are behind someone else's switch and add a few nanos of latency. Given that over 10G each fill message is 1 mic this will hardly matter at all. So anyone has the potential to host a server for 1-2k per month and enter a level playing field.
Sensationalist news articles are written by people with an agenda and who are obviously willfully ignorant of the facts.
There are plenty of valid reasons to criticize the CME but these trumped up 'fairness' issues just distract from the real problems. This is actually one of the things they did right.
Sensationalist news articles are written by people with an agenda and who are obviously willfully ignorant of the facts.
There are plenty of valid reasons to criticize the CME but these trumped up 'fairness' issues just distract from the real problems. This is actually one of the things they did right.
I have not researched colo pricing much so this might be an uninformed comment. My assumption was that hosting providers would buy up rack space and sell it out to individual traders. Guavatech and Rithmic are two firms that offer this, at both retail and institutional pricing (last time I checked). Chicago has to have other providers in the $1000/mo and under category. What's the controversy here?
The controversy is over the advantage....is the advantage the ability to SPOOF or get REAL ORDERS PLACED faster than the other traders/bots.
My contention : It's the SPOOFING driving this.
All evidence seems to indicate that the CME has decided to collude with Jump and a few other big players. I don't think trader outcry will change this. Maybe traders should migrate to ELX or wherever their order flow is treated better.
Interesting. I had never even heard of the ELX. Hmmmm....
What is the relationship between the ELX and the OCC?
Seems kinda weird that ICE is content to not directly challenge CME too much these days. You'd figure a few well placed fee reductions (Brent, Russell) and some other kind of thunder stealing might have came to their mind by now. Its absolutely necessary that CME has direct and unavoidable competition to keep things in check.
Hopefully the competition you speak of doesn't result in the Reg-NMS style rules that have corrupted the equities markets.
It's more like lack of competition resulting in corruption that I'm concerned about.