<story><title>Goldman Sachs is spending $100M to shave milliseconds off stock trades</title><url>https://www.cnbc.com/2019/08/01/goldman-spending-100-million-to-shave-milliseconds-off-stock-trades.html</url></story><parent_chain><item><author>eecc</author><text>What’s the minimum lag for a packet to reach around the world?&lt;p&gt;Multiply x2 and add an extra 10%.&lt;p&gt;Make that the minimum order placement tick duration.&lt;p&gt;There would be 1 single global price and no arbitrage between markets possible.</text></item><item><author>nickles</author><text>Adding to this, HFT is a product of rule 612 of Reg NMS (the sub-penny rule). Markets are not allowed to show quotes in increments of less than $0.01 for most names. Since traders cannot compete on price, they have been forced to compete exclusively on speed.&lt;p&gt;The impact of such regulation was tested by the SEC recently with the &amp;#x27;tick size&amp;#x27; program. Instead of reducing the minimum increment, some names saw it increased to $0.05. The hope was to increase liquidity while decreasing volatility in these names. In fact, those names experienced decreased liquidity with no decrease in volatility.&lt;p&gt;HFT is a result of regulation.&lt;p&gt;[0] &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.sec.gov&amp;#x2F;divisions&amp;#x2F;marketreg&amp;#x2F;subpenny612faq.htm&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.sec.gov&amp;#x2F;divisions&amp;#x2F;marketreg&amp;#x2F;subpenny612faq.htm&lt;/a&gt;&lt;p&gt;[1] &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.benzinga.com&amp;#x2F;general&amp;#x2F;education&amp;#x2F;18&amp;#x2F;04&amp;#x2F;11517027&amp;#x2F;the-secs-tick-size-program-likely-to-end-heres-why-thats-a-good-thi&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.benzinga.com&amp;#x2F;general&amp;#x2F;education&amp;#x2F;18&amp;#x2F;04&amp;#x2F;11517027&amp;#x2F;th...&lt;/a&gt;</text></item><item><author>codingslave</author><text>People love to rail on HFT, but at this point, its really not that profitable. It&amp;#x27;s just a reality of trading in the markets. There was a blip of time between 2008 and 2014 when HFT was extremely profitable. Those inefficiencies have been gone from the market for years. People were whooped into anger about how much money was being made, at this point its a complete non issue and needs to be removed from the highlight reels aimed at generating anger in the public. Lets move on from discussing the boogey man that is HFT, its really nothing.</text></item></parent_chain><comment><author>H8crilA</author><text>Orders are filled in the order that they arrive to the exchange (if there&amp;#x27;s more than one order at the same price). A global mis-pricing would still be subject to a race to exploit it - whoever submits first gets the fill, even if it happens in the future (in the next tick).&lt;p&gt;What you&amp;#x27;re proposing is turning continuous trading into a fast series of auctions, like what happens for every ticker on every exchange at the opening. This would have the disadvantage of no clear bid&amp;#x2F;ask - how can you be sure that the parties do not withdraw their offers before the next tick? And surely you must allow for offer withdrawals.</text></comment>
<story><title>Goldman Sachs is spending $100M to shave milliseconds off stock trades</title><url>https://www.cnbc.com/2019/08/01/goldman-spending-100-million-to-shave-milliseconds-off-stock-trades.html</url></story><parent_chain><item><author>eecc</author><text>What’s the minimum lag for a packet to reach around the world?&lt;p&gt;Multiply x2 and add an extra 10%.&lt;p&gt;Make that the minimum order placement tick duration.&lt;p&gt;There would be 1 single global price and no arbitrage between markets possible.</text></item><item><author>nickles</author><text>Adding to this, HFT is a product of rule 612 of Reg NMS (the sub-penny rule). Markets are not allowed to show quotes in increments of less than $0.01 for most names. Since traders cannot compete on price, they have been forced to compete exclusively on speed.&lt;p&gt;The impact of such regulation was tested by the SEC recently with the &amp;#x27;tick size&amp;#x27; program. Instead of reducing the minimum increment, some names saw it increased to $0.05. The hope was to increase liquidity while decreasing volatility in these names. In fact, those names experienced decreased liquidity with no decrease in volatility.&lt;p&gt;HFT is a result of regulation.&lt;p&gt;[0] &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.sec.gov&amp;#x2F;divisions&amp;#x2F;marketreg&amp;#x2F;subpenny612faq.htm&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.sec.gov&amp;#x2F;divisions&amp;#x2F;marketreg&amp;#x2F;subpenny612faq.htm&lt;/a&gt;&lt;p&gt;[1] &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.benzinga.com&amp;#x2F;general&amp;#x2F;education&amp;#x2F;18&amp;#x2F;04&amp;#x2F;11517027&amp;#x2F;the-secs-tick-size-program-likely-to-end-heres-why-thats-a-good-thi&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.benzinga.com&amp;#x2F;general&amp;#x2F;education&amp;#x2F;18&amp;#x2F;04&amp;#x2F;11517027&amp;#x2F;th...&lt;/a&gt;</text></item><item><author>codingslave</author><text>People love to rail on HFT, but at this point, its really not that profitable. It&amp;#x27;s just a reality of trading in the markets. There was a blip of time between 2008 and 2014 when HFT was extremely profitable. Those inefficiencies have been gone from the market for years. People were whooped into anger about how much money was being made, at this point its a complete non issue and needs to be removed from the highlight reels aimed at generating anger in the public. Lets move on from discussing the boogey man that is HFT, its really nothing.</text></item></parent_chain><comment><author>hoseja</author><text>How is the packet traveling? Through undersea fiber? Through Starlink? Through the Earth by neutrinos?</text></comment>