This is the single biggest problem with the Michael Lewis book is that it implies that this is happening without ever walking through it.
This is the single biggest problem with the Michael Lewis book is that it implies that this is happening without ever walking through it. What is actually happening is that: 1. HFT is quoting both buy and sell prices on every exchange. 2. A big buyer sends orders to all of the exchanges trying to buy (or sell) all of the available inventory at a given price. 3. On 1 exchange the big buyers order gets there earlier than on other exchanges, triggering a transaction with the HFT. 4. The HFT uses that transaction as a price signal to change their prices on all the other exchanges and if they are faster than the big buyer, the big buyer cannot take advantage of the lower price. There is no middleman buying from 1 place and selling to another and driving up the price. What this sort of price signaling does is allow the HFT to quote smaller spreads in the more common case, when 1 participant is not trying to wipe out all of the liquidity in the market at a given price point.
Posted by kasey_junk on Sep 23, 2014, 3:18 PM
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Raise real-world problems, find people facing the same issue, and discuss solutions.9,000 issues0 comments
pricing (E-commerce)
Fake websites pretending to be legitimate websites in order to steal your passwords was considered a HUGE problem.
3.5 Flash was always too expensive for a "flash" model.
I don't think the realistic alternative here was “hire a team for a month and get a better semantic conversion” For a rewrite of this si...
I was hosting on a PC at home like 10 years ago.
I live in walking distance of all these things, and the farthest I’ve gotten my kid to do things alone is to walk to and from school (a w...
It was a long time ago, so I don't remember.
I still like to buy my cheap and esoteric Chinese stuff from Amazon.
My local area used to be great to find old used woodworking tools for cheap.
This is the single biggest problem with the Michael Lewis book is that it implies that this is happening without ever walking through it.
This is the single biggest problem with the Michael Lewis book is that it implies that this is happening without ever walking through it. What is actually happening is that: 1. HFT is quoting both buy and sell prices on every exchange. 2. A big buyer sends orders to all of the exchanges trying to buy (or sell) all of the available inventory at a given price. 3. On 1 exchange the big buyers order gets there earlier than on other exchanges, triggering a transaction with the HFT. 4. The HFT uses that transaction as a price signal to change their prices on all the other exchanges and if they are faster than the big buyer, the big buyer cannot take advantage of the lower price. There is no middleman buying from 1 place and selling to another and driving up the price. What this sort of price signaling does is allow the HFT to quote smaller spreads in the more common case, when 1 participant is not trying to wipe out all of the liquidity in the market at a given price point.
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