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Comment: Re:Lets call it what it is..... (Score 1) 246

What you describe is not arbitrage. Arbitrage would be buying stock on one exchange and selling it on another without knowing jack about the order book.

What I am describing is exactly arbitrage. There is not one order book, there are fourteen order books (one per exchange). When one order book gets cleared out, the arbitrageurs make a bet that the other order books will get cleared out as well, so they take on the position with the hope of now being long at the new bid, or short at the new ask. They do not know that the other books will get cleared out, because they don't know if you wanted e.g. all 22,000 Intel shares, or just 2,000 (which just so happened to clear out 3 exchanges, but not the others).

This is definitely a problem for large executions: you move the price before you are done with your whole "trade". This has always been a problem for executing orders larger than the current top-of-book. It is made worse because there are so many exchanges, but also because some of them are so darned fast that HFT systems can beat brokers' order routers. You could argue that there should be a delay in publishing market data to ensure that routers can compete. You could also argue that it doesn't make sense for fourteen exchanges to exist, with regulation that merely attempts to paper-over fundamental natural laws (simultaneity). But you can't argue that it is not arbitrage.

Comment: Re:Lets call it what it is..... (Score 1) 246

Obviously what they are doing is not illegal as they are still doing it. They are very good at gaming the system.

There exist regulations to establish a "National Market", but the reality is that right now there are 14 different exchanges*, and therefore 14 independent order books to participate in. The HFT that you object to in particular is the style that performs arbitrage among the order books. If you think that arbitrage is front-running, you should start complaining to the SEC about the massive fragmentation in the US stock market which creates this situation in the first place.

* NYSE, NYSE ARCA, NYSE MKT (formerly the American Stock Exchange), NASDAQ, NASDAQ PSX (formerly the Philadelphia Stock Exchange), NASDAQ BX (formerly the Boston Stock Exchange), NSX (formerly the Cincinnati Stock Exchange), CBOE, Chicago Stock Exchange, BATS, BATS-Y, EDGX, EDGA, and now LavaFlow. Notice that's 14 exchanges with three owned by NYSE, three owned by NASDAQ, two owned by BATS, two owned by DirectEdge. Clearly market fragmentation benefits the exchanges.

Comment: Re:Limit order? (Score 1) 246

Front running may be illegal but you don't see many prosecutions for it.

For firms paying for retail order flow, I expect front-running is not worth the risk of getting caught. Why bother front-running when they can just pick which retail orders to be the counterparty against? And if they route the "toxic" retail orders to the open market, they could conceivably generate their own orders and send them after the retail order to a different exchange, and potentially still trade before the retail order trades (violating the spirit—but not the letter—of the regulations). I think it would be hard to build a case against a "well-done job".

Comment: Re:Forbit all HFT (Score 1) 246

Better yet, how about a tiny tiny tax on each trade?

Such a thing exists, but under a different name: SEC Section 31 Assessments amount to a tax on sales to fund the SEC's activities. As market volume is constantly changing, the rate is periodically updated; the current rate is $17.40 per $1 million sold (notional value, so price × quantity). This assessment is applied to all sales, so it behaves as a tax on HFT (half of whose volume is sales on a given day, so they can go home without a position). Right now the rate is only adjusted for budgeting and volume predictions, but it could conceivably be used as a punative measure against excessive trading. If it was adjusted by a large amount, you can expect that market spreads would widen accordingly and total trading volume would drop. I think the rate could probably go higher than the current value without much impact, but there's definitely a tipping point where the "friction" from the assessments would cause major liquidity problems. For scale, consider that a 1% tax on the notional value of all trades would be one thousand times larger than the current Section 31 rate.

Comment: Re:It IS about profit. (Score 1) 348

For example I've heard that the Canadian tar sands oil production requires a minimum price of around $85/barrel to be viable. If we start digging up oil shale it's got to be a lot more than that.

It's worse than that: more exotic sources of crude oil require more energy to extract—potentially more energy than is available in the oil itself! Because energy density is high from crude oil, it may make sense to "waste" energy in extraction because the result is useful as a transportation fuel, and also to stabilize relative prices between energy sources (e.g. spending cheap natural gas to produce expensive crude). But it still means that some energy extraction is a net loss, which is a very bad starting point.

Comment: Re:If Comcast were Exxon (Score 1) 520

by smellotron (#46331353) Attached to: Netflix Blinks, Will Pay Comcast For Network Access

If Walmart wants to buy bread from BreadCo, what are they going to pay for it with? Walmart gift cards? ... This isn't a recipe for a stable economy, it's a mess.

I'm not sure what your point is with all of this. Your argument seems to be "if the US government disappears overnight, things fall apart." But that's not very constructive, because it's based on an extremely thin premise: immediate devaluation of USD to 0; no massive worldwide selloff, just *poof* it's gone. Furthermore, you don't seem to be able to see past the initial messy period. Sure, there will be a large barter economy. But that's not new, people have survived with barter economies in the past! So, something will appear to fill the USD void, and stability will slowly return. Because if it didn't, then we wouldn't be talking about this today. We would be trading goats and ball bearings, and murdering 70-year-old men in suits.

Comment: Re:Force them to warrenty whole unit.. (Score 1) 526

by smellotron (#46208051) Attached to: Customer: Dell Denies Speaker Repair Under Warranty, Blames VLC

Well I do have to admit that when I took my Mac into the shop the guy at the Genius Bar didn't even blink when I told him it was running Linux. So none of this "you are running the wrong software" shenanigans there.

As a counter-example, I had "you are running the wrong wireless access point" problems from the Genius bar. My wife was seeing occasional DNS resolution failures and generally slow web browsing, which turned out to be packet loss between the laptop and the access point. At least two techs immediately argued that the problem must be the access point, and that we should replace it with an AirPort. It took four tries (phone calls and in-person) to find someone who would honor ping statistics from a variety of wireless devices.

Comment: Re:Replusive (Score 1) 505

by smellotron (#46132125) Attached to: The JavaScript Juggernaut Rolls On

I'm not saying Javascript is superior or inferior to C.

I'm not trying to argue that any language is better, either. I originally responded to this:

Name one other language that is as well supported and as broadly implemented as JavaScript?

and your subsequent reply moved the goalposts by arguing about deployment effort. Yes, you're right, C software requires more work to deploy to N platforms, but that is irrelevant to the presence of broad multi-platform support. I'm really not trying to say that C is better than Javascript. But surely it has a larger footprint across platforms!

I think it's safe to say that you prefer C to the exclusion of everything else.

Actually, no. I can read C fine, but I don't code fluently in it. I usually switch between C++, Python, and bash depending on the task.

Comment: Re:Replusive (Score 1) 505

by smellotron (#46131939) Attached to: The JavaScript Juggernaut Rolls On

and you must compile for every platform.

Yes, deployment requires compilation once per target. How many platforms exist which have a javascript interpreter but no C compiler? I believe my point stands.

Since nobody has offered any other languages to your challenge, I'll suggest Lua as a trivial alternative: the core language is implemented in ANSI C, so it is likely that Lua is portable to any platform that supports C. However, the core functionality of Lua is ridiculously hamstrung (ANSI C doesn't support sockets, for example) so the language is not well-suited for general-purpose programming.

Comment: Re:Replusive (Score 2) 505

by smellotron (#46130759) Attached to: The JavaScript Juggernaut Rolls On

Many fighting games feature reaction windows no more than 5 ms wide, and some have windows ~1 ms wide. And players can hit them.

I've heard of fighting games (e.g. Street Fighter) with 1 frame windows, but the games were 60 fps ~ 16.67ms. That is more in line with your figures from John Carmack's experimentation. Your 1ms figure does not sound credible, can you provide a reference?

To do nothing is to be nothing.