HFT "quote stuff" (there's an interesting idea...)

M

MarketMasher

http://www.zerohedge.com/article/ho...6-and-threatens-destroy-entire-market-any-mom

"If you could generate a large number of quotes that your competitors have to process, but you can ignore since you generated them, you gain valuable processing time. This is an extremely disturbing development, because as more HFT systems start doing this, it is only a matter of time before quote-stuffing shuts down the entire market from congestion. "

Interesting idea - use the speed at your disposal to tie up the competition's processing power.
 
It kind of reminds me of the jerk in school who used to crash the campus computer whenever he didn't have his project done on time.
 
Interesting idea - use the speed at your disposal to tie up the competition's processing power.
More...

yeah..indeed...but not for retailer.....your broker will close your account in next minute or two after your first quote generation....i've tried something similar few years ago..probably even before HFT :cool:
 
Quote from MarketMasher:

http://www.zerohedge.com/article/ho...6-and-threatens-destroy-entire-market-any-mom

"If you could generate a large number of quotes that your competitors have to process, but you can ignore since you generated them, you gain valuable processing time. This is an extremely disturbing development, because as more HFT systems start doing this, it is only a matter of time before quote-stuffing shuts down the entire market from congestion. "

Interesting idea - use the speed at your disposal to tie up the competition's processing power.
More...

i knew this would happen a year ago and I told my friend, who wanted to do C++ programming work for a HFT firm, that HFT is not a viable business long term and he will be out of work soon.

Basically HFT is front running market and because of that two results will happen sooner or later

1) government will shut them down
2)everyone will do HFT and market will crash
 
simple rule they could implement: you cannot issue quotes for more than 2 standard deviations away from the normal rolling 10 or 30 period rate of issuance....

QCOM let says has 10 million shares a day with 100000 orders couldnt issue more than say 4 orders a second...

60*60*8 = 28,800 seconds in a day

100,000 orders a day

--------------------

approx 4 orders of 100 shares could be issued each second.


This would make it difficult to trade single stock event trades however.... but it would bring back legitimacy to the market.

This would likely kill the basis of the hedge fund industry due to a liquidity relaxation... making controlling order flow by Market Makers and Hedgies problematic, but better for institutions and individuals.
 
You must log in or register to reply here.
Back
Top