how far ahead of us is institutional trading?

[newwurldmn]

Dafuq? You sound like a troll that got your feelings hurt by my other post so now you gonna follow me around the forum like a grumpy old troll?

no. I’m curious. You were so upset that this forum was a 1 size fits all.

should this question be answered in general or specific to the scalping timeframe you employ?

edit: speaking as a former algorithmic market maker, flow trader, and prop trader.

 

[EdgeHunter]

HFT is running off the private feed, not the SIP if that's your question. I can't quantify the time differential, but the data cost is material. This is pretty much what "Flash Boys" highlighted....

Exactly... To fully understand the speed execution of top HTF Traders private feeds versus the NYSE Exchange consolidated public SIP feed... It would be like pitting a Voluptuous (LOL) Female Walmart Shopper vs Top Olympic Runner... In a foot race.

 

[2rosy]

I was mostly curious how powerful their algo servers are.
and what they are capable of

Assume the servers are the best available. I remember highly customized kernels, openonload bypass, fpga, microwave networks, a lot of internalized orders, unimaginable fees. Taking advantage of how networks and routers work over tcp and udp

 

[rb7]

Exactly... To fully understand the speed execution of top HTF Traders private feeds versus the NYSE Exchange consolidated public SIP feed... It would be like pitting a Voluptuous (LOL) Female Walmart Shopper vs Top Olympic Runner... In a foot race.

Wtf are private feeds?
There are only 2 types of feed:
SIP consolidated
Direct exchange feeds

None of them can be viewed or named 'private' as everybody can access them (provided they have the money and the technical infrastructure).

 

[Slow Learning Elf]

Wtf are private feeds?
There are only 2 types of feed:
SIP consolidated
Direct exchange feeds

He probably meant "prop" feeds. Some low-latency players prefer to parse their own feeds (directly from local multicast). Most, however, use proprietary feeds by various providers and get them via cross-connects at similar latencies. These prop feeds might be a touch slower but add all kinds of nifty features such as aggressor assignment.

 

[EdgeHunter]

Wtf are private feeds?
There are only 2 types of feed:
SIP consolidated
Direct exchange feeds

None of them can be viewed or named 'private' as everybody can access them (provided they have the money and the technical infrastructure).

Yes... Direct Exchange Feeds, like Pico.net is a private (for pay feed you can subscribe too - this needed to be said ?) and are faster... much faster than SIP which is a public feed. So, Pico.net sells their ROUTED AND NORMALIZED PRIVATE DIRECT exchange feed at a cost of 2K to 8K depending on your needs

Here is interesting PDF White Paper on this...

https://faculty.haas.berkeley.edu/hender/nbbo.pdf

 

[mute9003]

so their servers are basically better than the exchange? Or exchanges still have to have the latest and greatest to crunch out all the traffic?
I did watch few of those documentaries recently about quants and institutions and was left with an impression that as retail traders we are always 10-50 steps behind in general when it comes to the market moves.
And we usually dont find out until years later how we got hustled (like the videos of market makers coming out now telling us what they used to do in thw 2000s and the videos of tmarket makers in 2000s telling us what they used to do in the 90s)
Like in gaming terms is me playing with nvidia 1050ti on wifi vs a sweat with 4090 watercooled and hardline with zero ping?
Or not that bad?


I just felt like we are just fucked as retail traders all the time because we are always behind what the institutions are doing

 

[poopy]

Like in gaming terms is me playing with nvidia 1050ti on wifi vs a sweat with 4090 watercooled and hardline with zero ping?
Or not that bad?


I just felt like we are just fucked as retail traders all the time because we are always behind what the institutions are doing

Not a good analogy as you're not competing with HFT or sell side. Anyone who bitches about trailing institutions isn't doing very well. You don't have to deal with being cap-constrained and having the risk-manager eyeballing your positions. You can afford to be a hobbyist with zero overhead and zero comms.

No serious gamer is running a 1050 Ti.

 

[schizo]

so their servers are basically better than the exchange? Or exchanges still have to have the latest and greatest to crunch out all the traffic?
I did watch few of those documentaries recently about quants and institutions and was left with an impression that as retail traders we are always 10-50 steps behind in general when it comes to the market moves.
And we usually dont find out until years later how we got hustled (like the videos of market makers coming out now telling us what they used to do in thw 2000s and the videos of tmarket makers in 2000s telling us what they used to do in the 90s)
Like in gaming terms is me playing with nvidia 1050ti on wifi vs a sweat with 4090 watercooled and hardline with zero ping?
Or not that bad?


I just felt like we are just fucked as retail traders all the time because we are always behind what the institutions are doing

There were trends before HF or AI. There are still trends. There were ranges before HF or AI. There are still ranges. What more do you need?

One interesting observation I've noted: I once thought using AI would totally eliminate human emotions and the market would be more orderly, but it seems to be the opposite.

 

[poopy]

Crossed market arb under RAES was a huge arb in the early 00s in SN equity vol inter-exchange. COMS 50C bid at 3.00 at PSE and offered 2.75 at PHLX. Max 20-lot priority to retail. I know a guy who cleared 1.4 the first couple of weeks, retail with IBKR and never risking more than $10K.