I hear you, and agree in principle. But in practice, I find the CME far more transparent than the more competitive (as far as trading venues are concerned) equities markets. Competition is great...until the regulators roll in
HFT at the CME - rigged to those that can pay
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I hear you, and agree in principle. But in practice, I find the CME far more transparent than the more competitive (as far as trading venues are concerned) equities markets. Competition is great...until the regulators roll in
By your logic.
XYZ company sends information to the newswire who then leaks it out to a certain few before the rest of the world is also legal. Hey, XYZ sent the info out at the same time
it makes sense.By your logic.
XYZ company sends information to the newswire who then leaks it out to a certain few before the rest of the world is also legal. Hey, XYZ sent the info out at the same time
This is a completely different situation. CME doesn't sit on quotes, they distribute them to everyone at the time they are generated. If your 3rd party vendor is slow... that isn't CME's fault.
I think it could certainly be argued that they do in fact sit on it by having participants get that same info milliseconds after others depending on what tier they are on, but hey I am wrong most of the time.
Overview
Currently ELX offers interest rates swaps products in USD, EUR and GBP cleared through LCH.Clearnet and through the CME. ELX also offers credit default swaps products cleared through ICE.
All ELX futures products are cleared through OCC.
From ELX website.
I think it could certainly be argued that they do in fact sit on it by having participants get that same info milliseconds after others depending on what tier they are on, but hey I am wrong most of the time.
The quotes leave CME at the exact same time, regardless of the participant. That is just physics....The speed of light and the size of the pipe govern how quickly data can travel. Proximity and hardware are expensive... nothing unfair about that, just reality.
Most of this stuff you keep saying is incorrect. There is everything unfair about it. We make our own reality.
One way to make it truly fair is for every cross connect to be the same distance to a matchine engine, within a reasonable tolerance, say 10 feet. This is the approach that Katsuyama took, by adding fiber coil to slow down the HFT. It has leveled the playing field at his shop. The approach here would have to be a little more complicated, since it isn't multi-building geography we are trying to equalize, but withing the same building:
I remember going to NY4
and noticing which cages were next to what. Guess what, Goldman Sachs cages (they had reams of them) were right next to the primo matching engines. And of course, being a huge customer, Equinix is in bed with them. All of it simply to continue the monopoly that these firms have over everyone else.
This is an unnecessary advantage easily solved by trivial technology. By equalizing the distance from any cage to another other cage to within ten feet of each other, 95% of the colocated unfairness of the markets would go away overnight. The cost to Equinix would be a little extra fiber for the closest cross connects. Eight tiers would go down to two, or in a dream world, one tier.
There are people that think all colocation should go away. That is a different issue, one that would probably never happen. Then there are exchanges where one can arbitrage one against another. God bless you if you have access to microwave between NY and Chicago. This is also not what I am talking about. I am talking about strictly flattening distance once you are at the same building.
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The Wolf Hunters of Wall Street
http://www.nytimes.com/2014/04/06/magazine/flash-boys-michael-lewis.html?_r=0
http://www.nytimes.com/2014/04/06/magazine/flash-boys-michael-lewis.html?_r=0
So that equalizes the latency differences for those in the building... what about the other side of the country? Even if you increase the minimum latency, the "problem" still exists.