The Gazillion dollar standoff over two HFT towers

zenostiffler said:
Is this also what Medallion and Jim Simons does?
More...
No. He does larger capacity stuff.

Clubber Lang said:
Good article on blatant front running, oops I mean “high frequency trading” and the battle for a millionth of a second advantage
More...
How is it front running? Nothing prevents you or anyone else from spending money, getting colocated, receiving a microwave feed etc - i.e. getting in the same game.
 
sle said:
How is it front running? Nothing prevents you or anyone else from spending money, getting colocated, receiving a microwave feed etc
More...
Whether or not I can personally afford it doesn’t change the fact that some people are paying to GET IN FRONT OF ORDERS.

What’s the difference between paying to get in front of orders and making risk free pennies a few million times a day every day the market is open, and paying to get in front of a buyout and making a risk free 100MM?

Both are illegal. However one is allowed because the exchanges are making a fortune off the fees
 
Last edited:
Clubber Lang said:
What you wrote is the exact definition of front running LOL.
More...

LOL indeed. Here is the actual definition of front running:
Front running, also known as tailgating, is the prohibited practice of entering into an equity trade, option, futures contract, derivative, or security-based swap to capitalize on advance, nonpublic knowledge of a large pending transaction that will influence the price of the underlying security.
More...

Note the bolded - that's a key aspect of front-running, also known as "non-public material information". In case of HFT, you just need to invest a few dollars to get there, which by definition makes it public.
 
sle said:
LOL indeed. Here is the actual definition of front running:


Note the bolded - that's a key aspect of front-running, also known as "non-public material information". In case of HFT, you just need to invest a few dollars to get there, which by definition makes it public.
More...
Haha ok.
Well played sir!
 
Clubber Lang said:
Haha ok.
Well played sir!
More...
This is not to say that there is issues with how HFTs integrate into the modern markets. IMHO, these problems are largely due to incentives/structure dictated by the exchanges and regulators.
 
sle said:
This is not to say that there is issues with how HFTs integrate into the modern markets. IMHO, these problems are largely due to incentives/structure dictated by the exchanges and regulators.
More...
Completely agree.
I think many issues have been ignored/overlooked because of a relentless 10 year bull market which coincided with the rise of HFT.
Will be interesting to see what happens with HFT rules etc when we finally have a bear.
 
I don't know guys. I mean, some ET'ers probably were trading on the floor. If you just asked them, I think they all traded on information not accessible to the public.

Restroom deals or hell, just being able to see the broker who is acting different when he has a big order to execute.... it even was allowed for some time to buy some contracts for yourself together with the clients order (which still was common practise in the FX markets for a long time).

But then, as sle said, you could have just bought a seat and enjoy the same benefits.

HFT are doing the exact same thing, just with a computer.

IMO the closest to level playing field was 2000-2008 when a TT X_Trader cost you 1500.- + dedicated line to the exchange for approx. the same money.

So it's not frontrunning, it's just business. Trading upstairs is ridiculously hard because you don't enjoy execution edge...that's why everybody wants execution edge and pays a lot of money to get it.
 
You must log in or register to reply here.
Back
Top