The Inability To Microsteal Or Nanosteal Is Absolute Armageddon For Buysiders
Another topic for the SEC to debate as it provides an "objective" and about 10 year overdue evaluation of market structure. We hope the SEC will rely on more than just Goldman Sachs' blockbuster ($49.95 on Amazon, straight to Kindle) tomes full of self-serving propaganda when determining who, how and why gets impacted by Sigma X and NYSE's SLP controlling the bulk of covert and exchange-based traffic.
From Themis Trading:
A month or so back we pointed out an article where a firm has
developed the tools to measure latency for time-stamping in nanoseconds
for HFT firms. So… milliseconds = thousandths of a second,
microseconds = millionths of a second, and nanoseconds = billionths of
a second. Got it…
Just a few days ago cPacket introduced a product to “measure one way
latency” at sub-microsecond accuracy. Amazing technology! We realize
how crucial latency is to the Information Arbitrage/ Latency Arbitrage Risk-Free Profit Extraction Modules
(ie stealing) of the HFT firms, so this is an amazing step! We are
excited for the HFT firms, retail investors, mutual fund investors,
pension fund investors, 401k account holders, who can all co-locate and
invest in the common technology (anybody can do it, after all) to play this game!
And play this game they had better: according to Tabb Group’s Bob
Iati, over 30% of buy-side shares in the U.S. are now executed by
algorithmic trading platforms, and that latency as little as 10
milliseconds could cause a firm to lose up to 10% of its revenues.
“It’s a real, hot issue.”
If not being able to steal at 10 milliseconds is so damaging, I
guess not being able to microsteal or nanosteal is absolute armageddon.