What do you mean free money?
I sell you a put option for example and it expires worthless, so I pocket ($$$) the premium you paid me, where is the problem?
The holy grail has been found
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What do you mean free money?
I sell you a put option for example and it expires worthless, so I pocket ($$$) the premium you paid me, where is the problem?
I was basing what I was saying on the above. If no one is taking the other side of the equity trade there is still going to be a market for options in a flat market?
lol. Seen stuff like this a million times come and go. I don't think it ends well. I certainly wouldnt trade on it.
Article is super lame too. This kinda journalism should be on people's magazine. Can't believe forbes lowered themselves to this kind of editorial piece. Do they think forbes readers are stupid and have no insight into the industry?
As for the suggestion that central banks start using these 'black boxes' to make decisions... lol. Don't even go there. Honestly. The market is already highly highly interlinked and correlated by all the trading and cross correlated products and derivatives that the systemic risk is extremely high. One product can have ripple effects affecting cross market and products. Policy makers should be completely cut off from any such influence and any such systematic links to their policy decisions. They certainly should not be using any 'black boxes' that a bunch of unknown computer science majors & programmers whipped up.
If central banks run another supercomputer code black box to help make decisions, then their decisions will be influenced by these highly linked and correlated markets and analytics. This is a terrible terrible idea. While using "Excel" and old fashioned economic theory is seen as 'old fashioned', this is actually the best way to do it. Last thing we need is the central banks decisions being dominated by supercomputers, algos and black box software spitting out ideas and numbers. Leave that mess to the markets.
Article is super lame too. This kinda journalism should be on people's magazine. Can't believe forbes lowered themselves to this kind of editorial piece. Do they think forbes readers are stupid and have no insight into the industry?
As for the suggestion that central banks start using these 'black boxes' to make decisions... lol. Don't even go there. Honestly. The market is already highly highly interlinked and correlated by all the trading and cross correlated products and derivatives that the systemic risk is extremely high. One product can have ripple effects affecting cross market and products. Policy makers should be completely cut off from any such influence and any such systematic links to their policy decisions. They certainly should not be using any 'black boxes' that a bunch of unknown computer science majors & programmers whipped up.
If central banks run another supercomputer code black box to help make decisions, then their decisions will be influenced by these highly linked and correlated markets and analytics. This is a terrible terrible idea. While using "Excel" and old fashioned economic theory is seen as 'old fashioned', this is actually the best way to do it. Last thing we need is the central banks decisions being dominated by supercomputers, algos and black box software spitting out ideas and numbers. Leave that mess to the markets.
It most likely won't be, and even if it were, it doesn't really matter in the end. This code/system is being touted a bit too much. Is it a cool idea with possible large upsides? Absolutely. But this thing coming to the market just simply won't be enough to cause a "flattening" in markets. It answers some cool questions, but like others have said, it is merely massive data mining. That only gets you so far when applied in the manner they've applied it.
Your logic of cracking the code implying every possible move being anticipated isn't completely sound. What I mean by that is, cracking such a code doesn't even come close to allowing every possible move being predictable (market predictions in general are inherently fallible, that's not how to win in the markets). There are so many factors to the market that causes and effects are constantly changing, just like correlations are. They help answer some questions, but they're not even close to being "the holy grail" to trading. Trust me, there's a reason these guys are out talking about how great it is while RennTech and the like are quiet black boxes ticking away... Those who hold "the holy grail" type models don't speak of them... certainly not via Forbes journalists. I'm slightly familiar with some of the systems/ideas that a few of the wildly successful HFs use and they have nothing to do with any topics ever discussed on this forum. Trust me! Again, those that do it right never share or speak of it.
If Central Banks are going to buy these codes : how much are they talking about per code ? billions ? and who will be receiving this money.
I hope the sales team has negociated a very good split.
I hope the sales team has negociated a very good split.
Its ridiculous. I don't think centrals banks should or will use these black boxes. They don't need to be 'plugged in' like all other HFT algos are already 'plugged in' and sifting through the same data and using the same analytics to make trading decisions. Doing so means they will be under the external influence or control of the same puppet masters, i.e. the people who have control over money flow that affects markets. Central banks need to be independent from all of this BS. Again, leave this sort of machine learning, big data analytics black box mess to the markets.
They will definitely not be buying this software. Central banks don't operate in the same capacity as hedge funds do, i think you're mistaken on what a central bank's purpose is. This algo will serve little to no purposes for them, they control the markets.
Yea, they won't be. They have their systems. Taking on software like this isn't what they do, nor what they should do. That further fragilizes an already very fragile system, that's the last thing they need.
Those hedgefunds are way ahead of the curve, they don't bother themselves with stuff like this. They have their strategies that have proven to work, there's no reason to switch - for all we know, they could very well have a similar in-house system already developed that does this, or even more.
This software is cool, but the crucial part of its success is knowing the right questions to ask. Most people simply don't get that. It only works as well as the operator.
nowdays nothing would suprise me 
. So central banks looking into software that are beattibg the market? why not.
. So central banks looking into software that are beattibg the market? why not.