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Guest Post: The Ultimate Trading Weapon

Tyler Durden's picture





 

Submitted by Frode Haukenes of Econotwist

The Ultimate Trading Weapon (pdf)

 

 


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Tue, 09/21/2010 - 20:30 | Link to Comment Mercury
Mercury's picture

That's great, just what this market structure needs, an even less level, bumpier playing field with little pot holes of murky liquidity. Can't you just smell the Progress?

 The more securities exchanges become de-centralized, computer driven and independent of the physical world - in the name of cheap execution, access and competition of course - the less fair they become.

Actually, now that most physical exchanges are gone (or turned into TV studios)  physical location and access to a particular physical location is more important than ever. Oops.

Tue, 09/21/2010 - 20:43 | Link to Comment Rimpinths
Rimpinths's picture

It's a thousand time easier to colocate at an exchange than it was to acquire a seat on the NYSE fifty years ago. That is progress.

 

 

Tue, 09/21/2010 - 20:55 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

A colocated server in every pot!

And every man a King! 

Tue, 09/21/2010 - 21:00 | Link to Comment tmosley
tmosley's picture

A server in every pot, and a bot up everybody's ass.

Tue, 09/21/2010 - 23:28 | Link to Comment Mercury
Mercury's picture

It's a thousand time easier to colocate at an exchange than it was to acquire a seat on the NYSE fifty years ago. That is progress.

I'm not sure that's true in any meaningful way.  NYSE seat prices have gone up and down, all over the place,  year to year, decade to decade.

The point is: today's technology could be used to place all market participants on a more equal footing and within a more centralized, liquid and transparent marketplace than ever before.  Instead what we get is old privileges and advantages being replaced with new, different and more complex privileges and advantages that pose much greater systemic risks and are counter to some of the fundamental functions that markets are supposed to serve in the first place.

The fact that one market participant now has a structural advantage because they dug a fucking tunnel to the exchange doesn't strike me as the best advertisement for America's capital markets at this particular point in history.

HOWEVER, the toothpaste may be out of the tube on this one.  Even if you have a CLOB and eliminate HFT via minimum time frames or fees you will still have to prioritize orders by time and honor first-come/first serve.  Events that happen in Chicago or London or Singapore will always have the potential to impact markets in other locales. Transmitting that info (and the trades that are determined by it) from point A to point B as quickly as possible (roughly, the speed of light + distance) will always confer an advantage.  I'm not sure there is any practical way to eliminate that - maybe limit time stamp (fractional second) detail to a bit more than it takes light to travel half-way around the earth?  I'll have to think about that some more...

Wed, 09/22/2010 - 05:05 | Link to Comment euclidean
euclidean's picture

For less than $100 an hour you can hire some mechanical machinery that would turn that 13.3ms into a few weeks.

I hope they have penalty clauses for down time built into the lease rates.

Tue, 09/21/2010 - 21:11 | Link to Comment Eternal Student
Eternal Student's picture

Exactly. And it points out that this is the wrong approach. A waste of money, IMO. A long fibre cable is silly; the money would've been better spent sitting right next to the nearest backbone.

What he should've done is designed the high speed hardware sitting next to the backbone. Sophisticated enough to do things in microseconds, not milliseconds. This is quite possible, and the only thing I'm surprised at is that someone hasn't done it already, if this is the type of speed that he's bragging about.

Of course, you really need to know what you're doing here. And it's expensive. And it really helps to have the right design done by the right engineers (hint: Not the H1-B's that Tyler is pushing). But it should be quite doable.

Tue, 09/21/2010 - 21:41 | Link to Comment UninterestedObserver
UninterestedObserver's picture

? Sorry but you sound clueless - many of the HFT algos doing arbitrage need access to multiple exchanges and will execute multiple trades simultaneously on various exchanges hence the need for ultar low latency connectivity between exchanges. Primary low latency routes being sold are Chicago to NY,NY to London and London to Frankfurt.

Tue, 09/21/2010 - 23:56 | Link to Comment Eternal Student
Eternal Student's picture

Thanks for the elucidation. You are correct, HFT algos aren't my thing. Cutting edge hardware and software is.

Wed, 09/22/2010 - 01:44 | Link to Comment Mark Beck
Mark Beck's picture

If we put on our QUANT hat for the moment, the link between exchanges in regards to speed must jive with the strategy and weather you front run (stuff) or actually clear. For the strategy to work all aspects, including time, must be in place and tested (profiled). A bottleneck could kill efficiency especially if dynamic, regardless of the backbone speed.

Critical speed between exchanges, to maximize profits, would probably include a cross exchange trading strategy rooted in resolution speed and response. So there would have to be an active multidimensional real-time model looking at cross exchange effects to stuff or clear. However, you have to have all the pipes performing end-to-end.

----------

Now as an investment, if the bandwith price is much lower than the competition's for an equivalent service, then you have an edge if you can sell enough bandwidth.

Mark Beck

Tue, 09/21/2010 - 21:51 | Link to Comment kalasend
kalasend's picture


How do you know they're not using the fastest hardware available?

And design/building hardware from scratch? You have any idea how much that sort of things would cost comparing to digging? And how long it would take to test/manufacture processor chips?

And regarding sitting next to the nearest backbone...what nearest backbone? Strategies nowadays need data feeds from multiple exchanges. Where would you place the hardware?

Wed, 09/22/2010 - 00:08 | Link to Comment Eternal Student
Eternal Student's picture

Yes, actually I know it quite well. But I wasn't talking about CPU's; that would be silly and unneeded. The only ones who do that are the military shops, and startups. You can do astoundingly well with off-the-shelf components, which is what the big telecom outfits do, saving the customizations for the critical parts where there aren't OTS parts which meet the requirements.

Tue, 09/21/2010 - 21:36 | Link to Comment Rusty Shorts
Rusty Shorts's picture

 - actual video of construction.

http://www.youtube.com/watch?v=AFM8i6jJFOc

Tue, 09/21/2010 - 23:06 | Link to Comment Johnny Dangereaux
Johnny Dangereaux's picture

+825

Tue, 09/21/2010 - 21:58 | Link to Comment UninterestedObserver
UninterestedObserver's picture

This isn't really a big deal anyway I thought Level3 had a route around 15ms so it isn't like Joe retail wasn't already getting gang raped by algos - it will just happen a little faster now lol

Tue, 09/21/2010 - 20:03 | Link to Comment BORT
BORT's picture

So for the poor innocent sitting next to the lake trying to figure out how to leave something to the wife to keep her happy after your gone, what is the point.  Or perhaps, what is the option.  When does this game end?  I am all for new things and have embraced them over my 60+ years, but this is a whole other thing.  Can you still be successful in the market.  Is there a place for the longer term trend interpreter?

Tue, 09/21/2010 - 22:41 | Link to Comment Augustus
Augustus's picture

BORT,

It is a situation of an entirely different game.  They are moving Tens of Thousands of shares for a penny or less arbitrage spread.  It makes no real difference in the price you pay for 1000 sh of AAPL or in the value it will have in 10 yrs. if the widow decideds to sell it.

Tue, 09/21/2010 - 20:04 | Link to Comment Bearster
Bearster's picture

Obviously,the solution is to make it illegal for people to dig their own tunnels, run their own fiber cable, or buy their own routers.  If necessary, the Fed could take over the companies which make optical switches to ensure that no one in the trading business can buy them.

What's good for the Internet and e-commerce is bad for markets.  The markets will have to be controlled by government in order to keep them free!

Oh yeah, and there should be a tax based on 1 divided by the latency squared!  That ought to punish the low-latency kings, and if not, 1 over latency cubed or 1 over latency to the fourth!

"Anything you can build, we can destroy," said Mr. Thompson.

Tue, 09/21/2010 - 20:06 | Link to Comment IrrationalMan
IrrationalMan's picture

This must have been the technological improvements that our country so despretely needs that obama was reading off of his teleprompter at the town hall meeting monday. 

Tue, 09/21/2010 - 20:08 | Link to Comment SoCalBusted
SoCalBusted's picture

Shovel ready!

Tue, 09/21/2010 - 20:08 | Link to Comment Let them all fail
Let them all fail's picture

wow, this is just ridiculous, i can't believe that trying to make money off the market has come to this - absolutely appalling....

Tue, 09/21/2010 - 20:09 | Link to Comment DosZap
DosZap's picture

The solution is since we know how the game is rigged, don't play the game.

Sooner or later, the game ends, or new rules are brought about, because of the lack of players.

The Mkts were not set up to exclude the majority,without them, there is no Mkt.

At least not one that is sustainable.

If allowed to stay the way it is, what's left of FMC is for sure going to be dead.

Tue, 09/21/2010 - 20:54 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

"The Mkts were not set up to exclude the majority,without them, there is no Mkt."

Oh this thread just keeps getting funnier and funnier. 

Yeah, I forgot the Chicago Board Options exchange is for the masses. It's a regular Wal-Mart. 

Oi. 

 

Tue, 09/21/2010 - 21:43 | Link to Comment UninterestedObserver
UninterestedObserver's picture

I thought the solution was to sell the low latency routes to the trading firms and make fat commissions and then trade the dollars for gold....

Wed, 09/22/2010 - 02:55 | Link to Comment StychoKiller
StychoKiller's picture

Soon, less and less Stocks will be trading at faster and faster speeds until ZERO is trading instantaneously!  Sound good to anyone?

Wed, 09/22/2010 - 05:45 | Link to Comment euclidean
euclidean's picture

+1125 we'll call it the 'sk law of HFT', kind of like Moores law is to transistors.

There is a mathematical limit of infinite mass in an infnitely tiny space called a Schwarzschild singularity at the centre of a nonrotating black hole. That's what all these guys are heading towards.

Tue, 09/21/2010 - 20:11 | Link to Comment Carl Marks
Carl Marks's picture

I don't need no stinking cable. I've got satellite.

Tue, 09/21/2010 - 20:15 | Link to Comment Atomizer
Atomizer's picture

Who are you?
My card, pretty lady.
Devil May-Care Music Production, Beelzebub Scratch, President.
I like your style, too bad you're not a singer.
Oh, but I am, I am a singer!
Hmm, no fooling.
No, no listen...
Fantastic, different.
I want to be a star, of please!
You've talked me into it. Contract!
Just our standard contract, nothing fancy.
Fame, fortune, fans, gold records, concerts, world tours, your name in lights.
Take your time, read it all.
Oh, I give up. Can I trust you?
Ok, I'll sign.
Write!

http://www.youtube.com/watch?v=9lwQRpBzbxg

Where do I go from here?

Market Movers

http://www.cmavision.com/market-data/

Top 10 CDS Positions

http://www.isdacdsmarketplace.com/exposures_and_activity/top_10_cds_positions

 

Tue, 09/21/2010 - 20:45 | Link to Comment Careless Whisper
Careless Whisper's picture

"i signed in blood, it's more permanent."

that was sick. thanks.

Tue, 09/21/2010 - 20:16 | Link to Comment rickardswhite
rickardswhite's picture

Thanks Tyler, if I ever loose my shirt because of a flash anything and market crash I know which lines in the bush to take my anger out on.

Wed, 09/22/2010 - 00:31 | Link to Comment Real Estate Geek
Real Estate Geek's picture

A man with a backhoe--and a trailer--could regularly and periodically do some serious damage to that kind of infrastructure.  I sure hope that doesn't happen to those nice folks.

Tue, 09/21/2010 - 20:20 | Link to Comment The Rock
The Rock's picture

FUCK THE NAJARIAN BROTHERS BTW...

Tue, 09/21/2010 - 20:21 | Link to Comment cxl9
cxl9's picture

1. Wouldn't it be cheaper to just move your trading operation from Chicago to New York, rather than lease a long, expensive wire between the two cities? The food's better in New York anyway.

2. How long before some hillbilly in western Pennsylvania accidentially cuts that cable in half with a backhoe? Or maybe not so accidentally.

3. What happens to this massive investment when/if HFT is ever banned or reformed? It seems unlikely that the current window of opportunity for HFT will persist long enough to recover the full cost of digging that hole from Chicago to New York.

 

 

Tue, 09/21/2010 - 20:34 | Link to Comment Dr. Sandi
Dr. Sandi's picture

2. How long before some hillbilly in western Pennsylvania accidentially cuts that cable in half with a backhoe? Or maybe not so accidentally.

With stakes this high, how about somebody with their own algorithm HIRES some hillbilly in western Pennsylvania  to cut that cable in half with a backhoe at exactly 1:50 p.m. next Thursday.

3. What happens to this massive investment when/if HFT is ever banned or reformed? It seems unlikely that the current window of opportunity for HFT will persist long enough to recover the full cost of digging that hole from Chicago to New York.

We use the hole to bury the rest of the economy.

 

Tue, 09/21/2010 - 21:45 | Link to Comment UninterestedObserver
UninterestedObserver's picture

Fiber routes already existed - they just groomed them and used new router capabilities to carve out the fastest paths so they could provide latency gaurantees - Verizon was the first their route was around 17 MS

Tue, 09/21/2010 - 22:29 | Link to Comment rd
rd's picture

You kind of took the words out of my mouth. I'm sure a competitor or an enfuriated investor will do just that. I don't know what sort of redundancies they have to back up theire network but I'm quite sure they should have a few incidents near term that will make them scratch their heads. The reasons why others haven't done it before should be among the ones you highlighted. I bet sooner or later regulation will/SHOULD make them illegal.

Tue, 09/21/2010 - 23:51 | Link to Comment Jay
Jay's picture

@2.

 

The telecom industry already has a term for it: backhoe fade.

 

 

Tue, 09/21/2010 - 20:25 | Link to Comment skippy
skippy's picture

Hay FPS games on weekends and I'm cool with it. E&Y used to have late Friday inter-department  scrims using HL2CTF on their mainframe (in my city), I used to wipe the floor with them on pub servers lol.

 

Skippy...head snot ya TD w/ mag...lol. 

Tue, 09/21/2010 - 20:26 | Link to Comment surfsup
surfsup's picture

Brings new meaning to the words "flash crash"

Tue, 09/21/2010 - 20:27 | Link to Comment thermroc
thermroc's picture

This is fucking madness.

Someday we will look back at this and think what the fuck were we doing?

Investing all that effort tunneling through mountains, so we can send a piece of light from New York to Chicago 3 milliseconds faster than we already can, when our sewers and gas pipes are exploding.

We have totally and absolutely completely LOST THE FUCKING PLOT HERE PEOPLE.

Terminal. Fucking Terminal.

This is not even funny anymore. This is joke, right? This article has got to a be a joke.

Tulips, fucking tulips everywhere.

Tue, 09/21/2010 - 20:46 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

HAHAHAHA!

Oh, it's a crazy place, this capitalist paradise we call "America". 

Water, power, sewers, gas pipes, roads - who needs 'em!

Those people who want the 3 milliseconds got the do re mi, pal and the folks who want the regular kinda pipes don't.

Nah, that couldn't be it. Not possible.

Wow, this article made my day.

Gold to $1700. 

 

Tue, 09/21/2010 - 20:54 | Link to Comment espirit
espirit's picture

Gold to $2500, and that's just the start.

Tue, 09/21/2010 - 20:58 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

Gold to $3300, in hearts. 

Your bid. 

Tue, 09/21/2010 - 21:35 | Link to Comment thermroc
thermroc's picture

Gold to disappear.

Will re-emerge when sanity returns to the earth.

Your bid.

Tue, 09/21/2010 - 22:04 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

Gold's in a bubble.

No Trump. 

Your lead. 

Wed, 09/22/2010 - 11:46 | Link to Comment ZeroPower
ZeroPower's picture

LOL

You guys speak of tulips and bubbles, and here you are doing exactly the same thing your oh so precious metal.

Gold to stay stagnant within a +/-$300 range, how about them apples.

Tue, 09/21/2010 - 21:56 | Link to Comment cougar_w
cougar_w's picture

The world gets so complicated in the end that you cannot find your ass with both hands.

Then you die of constipation -- all Elvis-style with a lot of grunting with a lot of whu-the-fug -- because you just totally lost track of your own ass.

Or something. I'm tired. Where's the exit for "today"?

Tue, 09/21/2010 - 22:11 | Link to Comment Bose Einstein OracIe
Bose Einstein OracIe's picture

I hereby second the tulips.

Tue, 09/21/2010 - 20:29 | Link to Comment Dagny Taggart
Dagny Taggart's picture

Hey cxl9, as one of those PA hillbillies, I want to point out that if something like that was in the works, you just outted the whole operation.

Tue, 09/21/2010 - 20:29 | Link to Comment Careless Whisper
Careless Whisper's picture

i call bullshit

Tue, 09/21/2010 - 20:29 | Link to Comment Bose Einstein OracIe
Bose Einstein OracIe's picture

There are ways it could be done instantaneously, across the globe, without 1 wire or fiber optic......but I don't want to give these fuckers any bright ideas. 

Tue, 09/21/2010 - 20:33 | Link to Comment thermroc
thermroc's picture

baby rabbits?

Tue, 09/21/2010 - 22:16 | Link to Comment weinerdog43
weinerdog43's picture

Hampsters....and hampster wheels. 

Tue, 09/21/2010 - 20:36 | Link to Comment Pool Shark
Pool Shark's picture

Spooky action at a distance

Tue, 09/21/2010 - 20:38 | Link to Comment Pool Shark
Pool Shark's picture

btw, Schrodinger called.

He wants his cat back...

Alive.

Tue, 09/21/2010 - 20:43 | Link to Comment Bose Einstein OracIe
Bose Einstein OracIe's picture

ya spooky action pretty much. It's very doable. What an entangled web we weave.

 

 

Tue, 09/21/2010 - 22:00 | Link to Comment Big Corked Boots
Big Corked Boots's picture

Will quantum entanglement explain where my socks go after I put them in the dryer?

Tue, 09/21/2010 - 22:04 | Link to Comment cougar_w
cougar_w's picture

That's nothing. That's just entanglement.

Now -- can you figure out how to do it backwards? Meaning today you start the analysis running backwards and you got the answer yesterday.

I've been thinking about programs that run in reverse. I think they have to write themselves on the fly. However as far as I can tell I don't figure it out someday. 

Wed, 09/22/2010 - 02:20 | Link to Comment New World Chaos
New World Chaos's picture

Yep, quantum entanglement/teleportation does theoretically work backwards in time.  My future self told me how to do it.  Now, with this top secret Star Trek technology, your algo will be able to infinitely front-run itself by placing orders a full second IN THE PAST!  All I need is a little funding.  Hoping to IPO my company MarketChaos.com for only ONE HUNDRED BILLION DOLLARS!  This is quite reasonable, in proportion to what these guys paid. 

Please pay in gold, delivered to my hollowed-out volcano lair.

Wed, 09/22/2010 - 03:00 | Link to Comment StychoKiller
StychoKiller's picture

Max Headroom, twenty seconds into the future!

Tue, 09/21/2010 - 20:31 | Link to Comment Jaacyn71
Jaacyn71's picture

I am sure that some mole/mouse/gnat/insect/fish lives along the path of the fiber, can't we save the "Mountain Mole" or something and get them to move the cable, taking a long out of the way loop to increase the milage back to the old railroad route length?

Not that I am for more regulation, but to see the company have to dig up at their expense and relocate wires to a non-advantaged area would be hilarious!  Just make sure those leases from the big banks have some really tiny print about "environmental relocations" are not a valid reason for termination of lease agreement!

Tue, 09/21/2010 - 20:38 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

HAHAHAHAHAHA!

Ahhh. Funny stuff. 

3 milliseconds. 

Gee, and I thought that America was a level playing field where the rich had no advantage over the "regular guy"....BWAHAHAHAHAHA!

HAHAHAHAHA!

Oh, you libertarians....funny, funny people. 

 

 

 

 

Tue, 09/21/2010 - 20:41 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

Just buy gold. I'm sure that'll teach 'em.

 

Tue, 09/21/2010 - 20:40 | Link to Comment Village Idiot
Village Idiot's picture

At first blush it sounds like the link might be for sale(?), if the price was right.  If so, what would someone pay for that kind of jump on the rest of the gang?

Tue, 09/21/2010 - 21:47 | Link to Comment UninterestedObserver
UninterestedObserver's picture

$300,000 per month for a 1 GiG connection

Tue, 09/28/2010 - 19:27 | Link to Comment Geoff-UK
Geoff-UK's picture

Money well spent.

Tue, 09/21/2010 - 20:42 | Link to Comment AccreditedEYE
AccreditedEYE's picture

Good God... When does the mode of delivery finally come 2nd to valuation of investment? I know, F me for being insolent enough to mention that equities should have V..A..L..U..E before they are bought.

They cloud true value with fraudulent accounting. They cloud transparency through dark pools. They cloud technical patterns with false computer algos carving out patterns and correlating all asset classes into 1. Now, they super charge it. Who BUYS into this crap market??? (...aside from the Fed!)

Tue, 09/21/2010 - 20:47 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

HEY! Just be quiet and buy some gold. 

Then move along. 

Nothing to see here. 

 

Tue, 09/21/2010 - 21:15 | Link to Comment Sancho Ponzi
Sancho Ponzi's picture

I'm writing software to identify blog trolls. You are providing sweet grist for the mill.

Tue, 09/21/2010 - 21:23 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

Thanks, Sancho. 

That was insightful commentary - responsive, topical, humorous and erudite. 

Tue, 09/21/2010 - 21:34 | Link to Comment GoinFawr
GoinFawr's picture

definitely better than some...

Tue, 09/21/2010 - 20:46 | Link to Comment PenGun
PenGun's picture

 That seems like a long time. 13.33 m/s is quite a long time in the world of computer machinations. It's not even all that fast for the distance.

 

 GS is just down the street.

Tue, 09/21/2010 - 20:47 | Link to Comment virgule
virgule's picture

There's something really wrong with this technical view. How much liquidity can you "see" and profit from in a 3 ms window?

Yes, you can definitely front-run everyone by 3ms, but the spread you can earn is only the spread that can occur on a 3ms time window, times the volume flowing during those 3ms.

And you can only front-run the next person. I really doubt this can pay for this kind of infra-structure if statistically only a very small handfull of players can make a decent living out of it.

Tue, 09/21/2010 - 20:51 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

If you trade first, you shape the price. 

If you trade half the market first, you shape the price of the whole market. 

Know the Monty Hall Problem? To make the right choice, you have to know what Monty knows and know his intent.

This is not about taking advantage of the market. This is about being the market. It's their world, you just trade in it. 

 

Tue, 09/21/2010 - 22:29 | Link to Comment FischerBlack
FischerBlack's picture

I thought this one was settled? To make the right choice with Monty Hall, you just have to change your choice the second time around.

Wed, 09/22/2010 - 03:27 | Link to Comment virgule
virgule's picture

You are correct - BUT you've added one more condition to the "standard Monthy Hall problem", that front-runner and front-run are both traders set to out-do each other (as opposed to "conventional investors" who decide to buy or sell for whatever other business prupose than pure stock trading).

If the front-run is a regular investor, it's a lot less obvious what his modified response will be, to a 3ms price differential that is not the true price (whatever that is).

Personally, my strategy to immunize myself from this shit: fix the price I want and wait. I might have to wait 10 minutes and you can front-run me as much as you want, it doesn't matter. I will either get the price I want, or not play at all, but won't give a single sub-penny extra to the fiber algos.

Wed, 09/29/2010 - 14:09 | Link to Comment Common_Cents22
Common_Cents22's picture

Like Lucy pulling the football away from Charlie, she'll let him touch the ball only when SHE wants him to.

 

Or you in a ring with a boxer that can punch twice as fast as you and can duck your every punch.  You at his mercy.  

 

It's not just about front running execution but rather influencing the market direction at will throwing out quotes that can be rescinded before they are hit.

Tue, 09/21/2010 - 20:54 | Link to Comment Bose Einstein OracIe
Bose Einstein OracIe's picture

The market for me is like going to the strip club, I don't bring any money I don't plan on spending. It can be fun trying to play chess with HAL. 

Tue, 09/21/2010 - 22:28 | Link to Comment FischerBlack
FischerBlack's picture

And just like a strip club, the whole thing has been arranged to separate you from your money as quicly and efficiently as possible.

Tue, 09/21/2010 - 20:54 | Link to Comment Common_Cents22
Common_Cents22's picture

Trading speed limits would go far to leveling the playing field.

Tue, 09/21/2010 - 20:56 | Link to Comment SamuelMaverick
SamuelMaverick's picture

300 million to save 3 milliseconds.  Wow, they must make untold fortunes with HFT raping and pillaging the poor suckers / sheeps stock market holdings.  I would love it if HFT was fucking eliminated or seriously shithammered.

Tue, 09/21/2010 - 20:59 | Link to Comment Id fight Gandhi
Id fight Gandhi's picture

That's a long run. What's to stop some nut from finding and cutting it?

Tue, 09/21/2010 - 21:44 | Link to Comment HungrySeagull
HungrySeagull's picture

Been there done that in US History.

Telegraphs by wire and morse code.

Then the Pony Express etc.

Tue, 09/21/2010 - 21:36 | Link to Comment gerd
gerd's picture

all we can hope for is that sarah connor finds this barksdale character before he creates SkyNet

Tue, 09/21/2010 - 21:48 | Link to Comment kalasend
kalasend's picture


How do you know they're not using the fastest hardware available?

And design/building hardware from scratch? You have any idea how much that sort of things would cost comparing to digging? And how long it would take to test/manufacture processor chips?

And regarding sitting next to the nearest backbone...what nearest backbone? Strategies nowadays need data feeds from multiple exchanges. Where would you place the hardware?

Tue, 09/21/2010 - 21:52 | Link to Comment InconvenientCou...
InconvenientCounterParty's picture

If the banksters and scheisters were laid out head to feet, would they all fit in the trench?

Wed, 09/22/2010 - 03:04 | Link to Comment StychoKiller
StychoKiller's picture

Probably not, there are millions of scheisters!

Tue, 09/21/2010 - 21:52 | Link to Comment realtick
realtick's picture

Zero Hedge: The Ultimate GS Psyops Weapon

Tue, 09/21/2010 - 22:18 | Link to Comment AccreditedEYE
AccreditedEYE's picture

Haven't seen you in a while! Hope you've been surviving.

Tue, 09/21/2010 - 22:16 | Link to Comment Village Idiot
Village Idiot's picture

If the thing runs from Chicago to New York, why doesn't someone just pull off to the side of the road and jam a shovel through it.  I'll buy the shovel.

Tue, 09/21/2010 - 22:33 | Link to Comment shc
shc's picture

+1 for the shovel idea. connection lost, bitchez! 

Wed, 09/22/2010 - 00:57 | Link to Comment redpill
redpill's picture

You gotta use an axe, just on principle.

 

Tue, 09/21/2010 - 22:26 | Link to Comment FischerBlack
FischerBlack's picture

Yay, the future has arrived. Or something.

 

Colonel Sandurz: Prepare ship for light speed.
Dark Helmet: No, no, no, light speed is too slow.
Colonel Sandurz: Light speed, too slow?
Dark Helmet: Yes, we're gonna have to go right to ludicrous speed.

Tue, 09/21/2010 - 22:47 | Link to Comment crzyhun
crzyhun's picture

OK you are fast....now flash up your a$$ and disappear.

Tue, 09/21/2010 - 22:49 | Link to Comment SnarkAttack
SnarkAttack's picture

Shouldn't the trading post be right in between the two spots if you want to arb between them?

Tue, 09/21/2010 - 22:58 | Link to Comment UninterestedObserver
UninterestedObserver's picture

Same difference - if they are in NY and arbing a Chi exchange then the NY side is sub ms because they are colocated there and the Chi trade takes the 13.3 ms + latencies from their gear/program. If the trading post was in the middle they would gain on the Chicago side but lose the instantaneous trade on the Ny side

Tue, 09/21/2010 - 22:59 | Link to Comment Dehrow
Dehrow's picture

This is kind of like building the Transcontinental Railroad, and then charging whatever the hell you want to let people use it.

I think I'm both awed and disgusted.

However, if someone builds a pipeline, then they won't have the railroads and their shipping costs, and that's the REAL money.

Wed, 09/22/2010 - 05:03 | Link to Comment williambanzai7
williambanzai7's picture

Worried about fiber throughput, latency rates and photon velocity? 

UBIK Ultra High Speed Console

http://williambanzai7.blogspot.com/2010/09/ubik-desk-top-trading-console...

TIME FOR F.A.R.T.

http://williambanzai7.blogspot.com/2010/09/fart.html

Tue, 09/21/2010 - 23:19 | Link to Comment Godisanhftbot
Godisanhftbot's picture

The name is meant to imply that if you don't lease with them, you will be "bent over and spread wide"

Tue, 09/21/2010 - 23:51 | Link to Comment working class dog
working class dog's picture

How is this superfast highway regulated?

How does this superfast highway benefit commerce in the US and increase the standard of living by making businesses grow. All this does is make stupid things happen sooner.

Use this technology for mankind's benefit,

Wed, 09/22/2010 - 01:09 | Link to Comment svendthrift
svendthrift's picture

Shall I assume that these machines don't read the notes in financial statements that my colleagues and I spent a week preparing? Why even report?

Wed, 09/22/2010 - 03:13 | Link to Comment Trichy
Trichy's picture

Of course he serves on the board of In-Q-Tel, you have gotta have backing by CIA if you are gonna be part of staging flash crashes.

Wed, 09/22/2010 - 04:50 | Link to Comment iota
iota's picture

There's something slightly phallic about this

"It's 1 " thick and stretches from NY to Chi-cago."

So anyone got a map of where this thing is laid? Just to satiate idle curiousity of course.

Wed, 09/22/2010 - 08:14 | Link to Comment Silverhog
Silverhog's picture

Trader HAL spent 300 Million to tap into a almost empty tank of sludge. Good luck on his endeavor. My money is out and safe in shiny stuff.  

Wed, 09/22/2010 - 08:50 | Link to Comment Anarchist
Anarchist's picture

You guys have totally missed the need for the "last mile" connection between the cable and the end user. The existing links you would need to connect through could make you exceed your latency budget. 

I would assume this cable terminates at the Chicago exchange or some obvious end point where most users are located.

Wed, 09/22/2010 - 09:38 | Link to Comment Capt Tripps
Capt Tripps's picture

Would be bitchen for Arena...

Wed, 09/22/2010 - 10:27 | Link to Comment gwar5
gwar5's picture

So, this is what it's come to... HF bunker trading with monster trucks?

Wed, 09/22/2010 - 16:15 | Link to Comment godzila
godzila's picture

Must say this whole thing is quite amazing... $300mn... I'm pretty sure these guys know what they are doing when you spend that sort of money. 

Thu, 11/04/2010 - 20:46 | Link to Comment rocky89
rocky89's picture

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