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Comment First principles molecular dynamics simulations... (Score 1) 448

by itamblyn (#35381208) Attached to: Contemplating Financial Trading At Picosecond Resolution
During the course of my PhD, and into my postdoc, I have performed "first principles" molecular dynamics simulations of various molecules and materials. What's the connection with high frequency trading? Well, those calculations, which involve a pretty decent solution to the SchrÃdinger equation, typically involved simulating the motion of atoms over timescales on the order of picoseconds. One of the advantages of such simulations (compared to say classical molecular dynamics) is that there are no empirical parameters involved. This is physics speak for "we didn't force the answer we wanted with a fit". One of the disadvantages of these methods, however, is that they can only look at processes which occur on short timescales, due to the high computational cost of the method. Just to be clear - LOTS of important physical processes occur on timescales longer than picoseconds. I would have thought the economy was one of those processes.

Now, back to high frequency trading. Why the push to faster transactions? The answer is simple: if you get there first, you do better. Believe it or not, firms with faster computers which are physically closer to the exchange have an advantage over those which are slower or farther away. The speed of light is actually something people consider when they are running financial transactions. If this seems ridiculous to you, it should. Traders argue that the existence of high frequency trading increases market liquidity. Let's assume for the moment that this is true (it's not 100% clear to me that it is) - is there a better way to achieve this goal? Everything I have read on this topic suggests that the typical business model is for large financial institutions to buy really expensive hardware which they place between legitimate buyers and sellers, siphoning off some cash in the process.

So, what is the alternative? How do we prevent time, money, and effort going into executing financial transactions on such ludicrous timescales?

I think the answer (as a Canadian I feel qualified to propose this), is that we need to establish Standard Financial Time. The concept is similar to Universal Time - if you want to build a railway, people need to agree what time it is. With SFT, exchanges need to establish the equivalent of a financial pulse. Transactions take place at regular intervals. The fact that you submitted your buy slightly before mine should mean nothing, provided they both arrive before the next beat. What should this timescale be? Well, if we want to have an efficient system (in the global sense), then everyone who would like to make a buy or sell offer needs to have an opportunity to do so. That means the pulse can be, at minimum, the time it takes to send a buy/sell order from any terminal in the world. For light to go from one side of the world to the other takes ~ 0.13 seconds. Anything faster than that, and you end up with financial types buying up computers in random spots on the earth trying to take advantage of information asymmetry due to the speed of light.

One problem this does create is that it is possible now to have two buys for a single sell, or vice versa. Fortunately the fix is straightforward. You either match the buyer and seller by a random number or, if you want to get fancy, you do something like the single transferable vote. Every buy order consists of an initial offer and a max offer (think of what happens when you bid on ebay). This works out well for sellers since they will maximize their sale price, and it works for buyers because they can minimize their payout. No matter how you go about doing it, the monetary advantage to shorter ethernet cables goes away; that can only be a good thing.
Education

Submission + - Do Hobbies Decrease Chances of CS Success?

Submitted by theodp
theodp writes: "Who knows what lexical analysis is?" asked the CS prof. "No one? What, don't you guys do this constantly in your spare time?" Quips like that, and fellow students who never seem to leave the computer lab, make CS student blogger Carolyn sometimes wonder if she really belongs in programming because she doesn't program all the time. "While I don't live to program, I do love to program," she explains, and in the end has decided that's good enough. Somewhere, the late, great, always-room-for-outside-interests Jeff Raskin is smiling.

Submission + - Is MS cheating on its own HTML 5 test? 1

Submitted by itamblyn
itamblyn writes: I just upgraded to the IE 9 RC and decided to see how it did on HTML 5 speed tests compared to the most recent dev channel build of Chrome (11.0.672.2). The result was more than x3 faster performance by IE (using a test created by MS in fairness). Interestingly though, the images and text were somewhat blurry, as if it wasn't being rendered at the full resolution of the window. Is this "legal"? Is Chrome losing because it's not cutting corners, or is this trick fair game and Chrome should be doing it as well. If you have a windows machine, you can do the comparison yourself here: http://ie.microsoft.com/testdrive/Performance/SpeedReading/default.html
Businesses

Examining Indie Game Pricing 188

Posted by Soulskill from the in-for-a-penny-in-for-a-fivespot dept.
As the second Humble Indie Bundle flourishes, having taken in over $1.5 million in pay-what-you-want sales, the Opposable Thumbs blog has taken a look at indie game pricing in general, trying to determine how low price points and frequent sales affect their popularity in an ocean of $60 blockbusters. Quoting: "... in the short term these sales are a good thing. They bring in more sales, more revenue, and expand the reach of games that frequently have very little marketing support behind them, if any. For those games, getting on the front page of Steam is a huge boost, putting it in front of a huge audience of gamers. But what are the long-term effects? If most players are buying these games at a severely reduced price, how does that influence the perception of indie games at large? It's not an easy question to answer, especially considering how relatively new these sales are, making it difficult to judge their long-term effects. But it's clear they're somewhat of a double-edged sword. Exposure is good, but price erosion isn't. 'When it comes to perception, a deep discount gets people playing the game that [they] wouldn't play otherwise, and I think that has both positive and negative effects,' [2D Boy co-founder Ron Carmel] told Ars. 'The negative is that if I'm willing to pay $5 but not $20, I probably don't want to play that game very much, so maybe I'm not as excited about it after I play it and maybe I drive down the average appreciation of the game.'"

Comment MAC Address? (Score 3, Interesting) 460

by itamblyn (#34400016) Attached to: Free IPv4 Pool Now Down To Seven<nobr> <wbr></nobr>/8s
Why is IPv6 not based on MAC adresses? I've never understood this. Every piece of electronics capable of connecting to a network has at least one unique hardware id already. Why do we need a new one? Is there are reason not to just use this number? Or have I misunderstood, and this actually IS the plan.

Comment Tools this that are this easy result in fixes (Score 1) 229

by itamblyn (#34108328) Attached to: Firesheep Author Reflects On Wild Week
Now the danger of unsecured wireless is no longer something that only tech heads know about. When you make it easy like this, it gets a lot of attention quickly. This makes it much more likely for websites to fix it. To be honest with you, I thought that gmail had been converted completely to SSL after the incident with Chinese authorities breaking into the accounts.

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