How Linux Mastered Wall Street 339
itwbennett writes "Linux has become a dominant player in finance thanks to its ability to pass messages very quickly, said Linux kernel contributor Christoph Lameter. 'The trading shops saw that the lowest-latency solutions would only be possible with Linux,' Lameter said. 'The older Unixes couldn't move as fast as Linux did.' One key attribute was the TCP/IP stack, the configuration of which determines how fast a message can be passed between two systems. Linux also offers financial firms the ability to modify the source code to further speed performance. 'It depends on how daring the exchange is,' he said, noting that NASDAQ uses a modified version of the Gentoo Linux distribution. Lameter will discuss how Linux became widely adopted by financial exchanges at the LinuxCon conference in Vancouver this week."
NASDAQ uses Gentoo? (Score:5, Insightful)
Oh dear god our economy is a whole lot more fragile than I ever imagined. Brings a new meaning to "emerge world".
Re:NASDAQ uses Gentoo? (Score:4, Funny)
So, what do I add to USE or CFLAGS to be able to call myself rich using imaginary money? CFLAGS="-fmake-money"? USE="federal_reserve"?
Re: (Score:3)
What, you've not heard of microsecond trading before?
You didn't actually think that stock exchange was somehow different from a rigged casino, right?
Re: (Score:2)
Re:NASDAQ uses Gentoo? (Score:4, Funny)
Nah, they should switch to Macs. There's nothing like running a TCP/IP stack that reuses a modified copy of old FreeBSD code without changing the comments. =)
Re:NASDAQ uses Gentoo? (Score:4, Insightful)
Thats kind of the point of BSD licensed code ...
They'd be much better off switching to FreeBSD since its known to have the fastest IP stack in existence, hence why its used for high end networking gear. Let me know when you see your BigIP running something other than FreeBSD.
Re: (Score:3)
Most high-end networking gear uses FreeBSD because of stability for the user interface. The actual network functionality is usually done in hardware. That said, who doesn't love fBSD for being rock solid. Linux is jus
Re: (Score:3)
FreeBSD is known for its throughput and stability under load. I never saw figures for latency.
Linux did have a lot of realtime stuff done over time (starting with 2.4.x)
Still, it is indeed a bold claim, and I'd like to see the data. Unfortunately it is not that kind of article.
Re: (Score:3)
Nah, they should switch to Macs. There's nothing like running a TCP/IP stack that reuses a modified copy of old FreeBSD code without changing the comments. =)
Why would they change the comments if they are reusing code that works? Just for the heck of it?
Re: (Score:2)
*modified* copy. They changed the code without changing the comments to reflect what the code was now doing. The code was not especially readable to begin with (being low-level TCP/IP code).
I dont care of WallStreet likes linux (Score:4, Informative)
Re:I dont care of WallStreet likes linux (Score:4, Insightful)
I still wont trust WallStreet with my money, which would be about like trusting an alcoholic with the beer at a party...
I don't know how it is over there, but over here in Sweden everyone has money in the stock market as all pensions were moved there some years ago. We're all supposed to choose where to invest them and to care about the wellbeing of Wall Street.
Kind of unfair advantage given to the propagandists of one economic system over another, in my opinion.
Re: (Score:2, Insightful)
If you liked the old government pensions, there should be an option to invest your private pension in national bonds.
Re: (Score:3)
Here in India, banks are allowed to invest 5 per cent of total assets in capital markets.
But they invest a mere 0.2 per cent in stock markets.
http://in.rediff.com/money/2005/sep/29banks.htm [rediff.com]
Re: (Score:2, Insightful)
So you don't have a pension / 401k.
Or a bank savings account.
Poor you.
Re: (Score:2)
Re: (Score:2)
sad (Score:3)
i have a few Gs in a savings account but i could pull it out any time i wanted it, and there would more than likely be a few bucks in interest added to it...
I used to be like that when I was younger. A few Gs in a savings accounts. It is fucking sad, and reckless as a few Gs can evaporate quickly in an emergency. I say this in retrospect because I've been there. Luckily I grew up. Even in these times, working in software is one of the most profitable and safe careers there is. Anyone who works in software and only has a few Gs in savings is doing something very stupid with his finances.
Re: (Score:3)
Re: (Score:2)
Savings accounts are for suckers. The Pension system in the US is an absolute disgrace though. It's not unheard of for HR reps to lose the paper work for people to apply for their 401k accounts.
Re: (Score:2)
It's too bad they don't use those skills in other areas. My friend Paul might be able to pay down the national debt. Hmm.... Maybe if we could consolidate all of our debt with Russia...
Re: (Score:3)
This story isn't about investing. It's about flash trading, skimming off the top of the market taking a share of trades as they are just about to happen.
Essentially, if you do any stock investment, these are the people that take a share of every purchase and sell you make by intercepting it as it's about to happen, testing for maximum buy/minimum sell value and trading both with you and the party you would have been trading with if they didn't have low latency supercomputers intercepting trades, pocketing t
Re: (Score:3)
For 0.1% interest, I don't see any incentive not to. At least this way you don't have bankers getting rich off your money.
Re: (Score:3)
Of course, bills under the mattress are losing value every day.
Re: (Score:3)
Of course, bills under the mattress are losing value every day.
By I. P. Knightly
thanks for whoring quants (Score:5, Insightful)
lets just ignore the fact that the Great Recession was directly enabled by the PHDs who turned their eyes askance at what the Gaussian Copula Function code was being used for. Not your problem right? You just make a tool, not your responsibility how others use it.
you had five kids to feed.
Re: (Score:2)
Of course the difference in how different the two are lies in what happened AFTER the bubble burst. The greedy joe schmoe lost all the money he put into his house, the greedy wall street bankers not only got bailed out(thus proving that rewards belong to the rich, conseq
Re: (Score:3)
What I dont get is why Obama largely continued the program
Because Obama is an establishment politician. He's going to listen to the lobbyists and the people he put in charge, which came straight from the industry. He did what any other mainstream politician would have done, regardless of party.
Re: (Score:2)
Republocrats favor bigger government, more federal concentration of power, a bigger military industrial complex, and the strengthening and extension of property rights.
Re: (Score:2)
I always thought they were Demoplicans. (or was it Demorons??)
In all fairness, the folks who succeed in becoming high level politicians got there by signing on to the establishment myths that prevailed when they were in their formative years - few of them got there by thinking for themselves. Those myths still drive their reasoning, and those myths still control most of the people in most of the think tanks and lobbying groups. So it's understandable that they continue to try the same things that their p
Re:thanks for whoring quants (Score:4, Insightful)
equally the fault of
Not how blame works. Google "blame is not a zero sum game". The influences (in part or wholly) responsible for any event are infinite, and so are the factors leading to those influences (i.e. it's not Goldman Sach's fault their parents didn't raise 'em right ;)
And if you really think people with no financial know-how who were misled by predatory lenders (with the responsibility of providing those people sound advice) are as responsible as those who carefully architected massive fraud, you must be a troll (intentionally or not).
Re: (Score:3)
I don't know any predatory lenders, personally or even know where to look. I do know of more than a few people who were getting "rich" by flipping homes every six weeks, who are now completely busted with more debt than they can handle.
What pisses me off is that I avoided both sides of the mess, but I'm supposed to pay for it all with more taxes.
Re: (Score:2)
I hear pool halls are a great place to find them. Also poker games. And Vegas.
Re: (Score:2)
What pisses me off is that I avoided both sides of the mess, but I'm supposed to pay for it all with more taxes.
Yah, those of us with a house we paid 20% (or more) down on, living in the "cheap" part of town because we don't believe in buying things we cannot afford are the ones getting the royal shaft over all this. Same as its been for at least last 25 years. All trickle down did, was trickle down the tax bill to the middle class, and fck us at the same time by causing our infrastructure to crumble. So, n
most subprime mortgages were not for homes (Score:2)
they were for house flipping and cash out refinancing.
and Synthetic CDOs are not based on mortgages, they are based on credit default swaps.
-reference
All the Devils are Here, Nocera and McLean
Re: (Score:2)
As someone who was on the borrowing side I will say this (and no I wasn't greedy, divorce cut household income in half, the purchase was made with the understanding that either of us could lose a job, and still cover the bills, as long as there was unemployment, followed by basic retail at least):
I did get helped by the bail out. BoA agreed to not pursue any deficit on a short-sale, this was not the way they acted before the bail-out.
Re: (Score:2)
They don't play with their own money. If you're putting your money into the market - directly or indirectly - then you're complicit. You could simply put your money in a savings account or in a safety deposit box after all. But no, you like the better returns over time. You're like a punter who sneers at his bookie as a lower class of person.
Put your money - including your pension benefits; they're among the largest actors in the market and known for not taking responsibility as stock owners - where your mo
you put your career into the market? (Score:2)
there are people with lots of savings and lots of education and lots of experienece who became unemployed, because of these games being played by others.
if they had 'put their money in the savings account', it wouldnt have helped them one iota when the economic system went into recession.
Re: (Score:2)
What I'm saying is, you can't blame the market actors without also blaming the people who give them the money to play with. Which are most of us, one way or another.
Re:thanks for whoring quants (Score:5, Interesting)
The Godfather tried to warn them. Don't know if I'm pleased or saddened that he lived long enough to see his incredible tools turned into "weapons of financial destruction". [Emphasis mine]
Luckily, he will be spared the repeat performance. Nothing's changed, they're still "printing money" every day. [emphasis theirs]
Re: (Score:2)
At the risk of being off topic.
But that said the latest crisis was not one of unexpectedly large standard deviations alone, but one of badly modeled correlations. The article is correct that the variance of a portfolio is larger than it looks, but many in the equity markets had figured that out. What happened in this recent crash was that they used scant data from mortgage markets to try and estimate correlations. For eg: Biggest possible loss for Californian mo
except that synthetic CDOs (Score:2)
were based on credit default swaps, which are basically, gambling, and have no relationship to any actual cash flow.
and a lot of the mortgage securities were based on fraud, and the ratings agencies purposely did not even look into them to see what kind of loans they had (let alone what kind of credit default swaps they had... )
and the bankers payed them to rate this stuff very highly.
there are dozens of books about this. its fraud, not a 'mathematical mistake' or 'not understanding math'. the CDO desk bank
people who disagree with you (Score:3)
Structured Finance and Collateralized Debt Obligations - Janet Tavakoli
Lost Trust - Lang Gibson (CDO expert who worked for Merrill Lynch)
The Trillion Dollar Meltdown - Charles R Morris
A Colossal Failure of Common Sense - Lawrence McDonald (former Lehman bond trader) and Pat Robinson
Confidence Game - Christine S Richard
EConned - Yves Smith
Diary of a Very Bad Year - Anonymous Hedge Fund Manager + Keith Gessen
The Big Short - Michael Lewis
All the Devils are Here - Bethany McLean and Joe Nocera
The Zeroes - Randa
Re: (Score:2)
The problem is that measures of uncertainty using the bell curve simply disregard the possibility of sharp jumps or discontinuities and, therefore, have no meaning or consequence. Using them is like focusing on the grass and missing out on the (gigantic) trees. In fact, while the occasional and unpredictable large deviations are rare, they cannot be dismissed as Ãoeoutliersà because, cumulatively, their impact in the long term is so dramatic.
So why do you think the above statement is right? A tool isn't completely broken merely because there are circumstances in which it isn't useful. It's worth noting here that the recent financial crash didn't happen because of discontinuities or the use of the Bell curve. It happened because of 50 to 1 leverage and well, the unrealistic appraisal of the risk of investing (or for that matter, doing anything at all) at such leverage.
I find this thread interesting due to the misconceptions that get exposed.
Re: (Score:2)
Highly recommended, these two books (get them as audiobooks if you want hours of driving amusement, education and horror). Just for perspective (one that is not in these books, or anywhere else that I know of - I thunk it up with my own little brain), this whole scenario can be seen as a classic tech bubble - the technology being the application of algorithms and various other forms of computer technology to technical stock trading. This bubble began back in the early 1970s, and happened to hit critical m
Re: (Score:2)
Misusing statistics certainly enabled this crisis. And you can certainly point at these failures to explain why the whole house of cards collapsed when it did. But I wouldn't say this was the cause.
The pile of debt in our economy has been growing exponentially since the mid 60's. It was inevitable that we would eventually reach saturation and our debt growth would stop and then reverse.
You can point to CDS's and other invented financial instruments for delaying the inevitable crash and making the problem
Re: (Score:2)
lets just ignore the fact that the Great Recession was directly enabled by the PHDs who turned their eyes askance at what the Gaussian Copula Function code was being used for. Not your problem right? You just make a tool, not your responsibility how others use it.
Let's also just ignore the fact that the PHDs were worth every penny they were paid while your bullshit morality isn't worth the time of day.
bullshit morality could have stopped the recession (Score:3)
before it started. lets take hedge fund manager Bill Ackman for example.
he was telling anyone who would listen that the Monoline insurance companies were based on fraud. they were insuring stuff they were never supposed to have insured, risky stuff, and then lying to investors about it.
what happened to him? He got investigated by the SEC. he could have gone to jail for a long time. the monolines didnt investigated, the ratings agencies didnt get investigated, the New York State Insurance regulators didnt ge
no, but my tax dollars (Score:2)
are the only reason that Goldman exists right now.
contradicts basically every book written (Score:3)
about the crisis. including
On the Brink by Henry Paulson, who was CEO of Goldman until 2006, and sec. of treasury during the crash
Too Big to Fail, Andrew Ross Sorkin
etc etc etc.
if Merrill hadn't been bought by BoA, and Morgan Stanley hadn't been bailed out by the Japanese banks, then Goldman would have fallen soon after.
Goldman got its credit default swap deals with AIG payed off, 100 cents on the dollars, when they werent even worth a fraction of that... payed off when taxpayers bailed out AIG. if AIG had
Customizable Kernel (Score:5, Interesting)
I know for a fact that at least one bank employs this in their high frequency trading group and probably all of them do.
Re: (Score:2)
Considering that $billions are being spent in order to shorten the lag for data transfer by microseconds, I'll bet the kernel has been pruned down and tweaked to the maximum extent.
A new data pipeline has just been completed at a cost of $100s of millions, going literally as straight as possible from Chicago to New York, in order to save a few milliseconds (or microseconds - I've heard both). For perspective, each microsecond is on the order of 200 meters of fiber optic cable (Wikipedia sez the speed of li
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Well-designed systems are already decently good at this. A typical system where this is a problem has a single high-demand process and a lot of low-demand processes. A good scheduler will dedicate the high-demand process to a core, with no context switches.
I don't know if it's easy to set processor affinity in Linux, but it's easy to set in Windows, with the net result that you can basically dedicate cores to individual threads.
Re:Customizable Kernel (Score:4, Insightful)
That would be an interesting and a not too hard a project, I am assuming. So this in turn would imply that there would already be an option in the kernel to do it right? So why not improve the performance of gaming or computation systems by recompiling the kernel to do this?
I suspect they are using some form of real-time extensions [kernel.org] to the linux kernel. One thing they all share in common is little to no OS functionality is available to applications that are running real-time because, it is almost always the case that as soon as you ask the kernel to do something for you, all bets are off as to when it will get done or even when you will get scheduled back on to your cpu.
So, in order for a game to take advantage it would need to isolate out whatever parts of the code are performance and dead-line critical so they wouldn't need to interact with the OS. And then the user would have to install and boot a linux kernel with the real-time stuff turned out.
Also, FWIW, real-time is not about speeding up computation, it is about hitting your deadlines exactly when they need to be hit - not too soon, not too late. In many cases you trade off computational performance in exchange for the ability to meet those deadlines.
Oh, Linux, how you've forsaken us (Score:5, Insightful)
The article is saying (obviously) that Linux is the chosen platform for high-frequency trading, i.e. algorithm-dominated trading that has everything to do with manipulating and responding to the market in nanosecond time frames for a quick buck and nothing to do with making stable, long-term investment decisions.
I'd rather see evidence of a Linux machine in Hitler's bunker than hear about Linux helping Wall Street punks get even further from real, useful activities than they used to be.
Re: (Score:2)
Linux is a powerful tool. As such it can be used for good or evil. It's not the tool's fault if it's used for evil.
Re: (Score:2)
When you buy low and sell high, that stabilizes prices. Since High Frequencies Traders are profitable, they therefore contribute to the stability of the market. And in fact, the bid-ask spread has in fact closed significantly as a result. Speculators and arbitrageurs are no different, so long as they're profitable. (And if you're not profitable, it's not long before you fall out of the market anyways, there's no need to police it.)
Re: (Score:3)
I can't tell if your being sarcastic. I hope so, because otherwise what you wrote was idiotic. Not only does it not make sense, but the argument itself isn't even logical.
Bottom line is that any profit extracted by HFT is at the expense of the real buyers and sellers of the underlying stocks.
Re: (Score:2)
Wrong X 2. While HFT and Quant analysis both generated tech bubbles in the financial markets, now that the bubble has passed they are merely tools that decrease the granularity (in quantities, prices and time-frames) of the efficient market. These technologies are turning the markets into much cleaner implementations of the essential fluid dynamics of the economic system.
Just for a very simple example, until very recently market makers could hold the difference between bid and ask prices a minimum of 1/8
Re: (Score:3)
would you rather have volatile markets with wide spreads, or more stable prices, with a highly liquid, small bid-ask spread
The stock market wasn't more volatile 20 years ago.
Liquidity wasn't a "problem" that needed to be solved either.
The markets of 75 years ago benefitted significantly with the march of technology, but HFT hasn't made a good thing better.
Arguing against new technology just because horse and buggy companies are going to go out of business is no sound argument at all.
And how is that relevant
Re:Oh, Linux, how you've forsaken us (Score:5, Insightful)
All HFT does is take advantage of arbitrage opportunities that a human is too slow for.
Exactly right but think about that for just half a second.
Who was benefitting from the fact that the arbitrage opportunity was not exploited? In each case it was the buyer or seller.
So the "profit" the HFT takes, is taken directly from the buyer or seller in each transaction.
Everytime I place a buy order, without HFT, i might have got the shares for a few cents less. Everytime I place a sell order, without HFT, I might have gotten a few cents more for the shares.
"HFT takes advantage of arbitrate opportunities that a human is too slow for" ... meaning my transactions would have closed without the "liquidity" HFT provided within seconds.
So how do you reach any conclusion other than "HFT" is leeching profits from the actual buyer and seller, while providing nothing of value?
Re:Oh, Linux, how you've forsaken us (Score:5, Insightful)
When you buy low and sell high, that stabilizes prices. Since High Frequencies Traders are profitable, they therefore contribute to the stability of the market.
This is exactly the fairytale middlemen tell themselves so they can sleep at night after making ludicrous amounts of money for producing nothing of value.
Their only goal in life is not to the the last person holding the bag or the bottom tier of the pyramid. That's why latency is so important, and that's why the "free market" is a myth- as long as your latency is higher than someone closer to the exchange, there can be no level playing field.
I've thought about this at some length, and barring "spooky action at a distance" to negate the effects of latency, two ideas commend themselves to me:
1) A fixed interval of latency imposed on all trades that is much larger than the maximum latency differential. This seems like it might help things, but it also seems like sweeping the problem under the rug- there would still be some advantage to lower latency in trades, after all. The "high frequency trades" would just occur as close to that fixed interval as possible.
2) An alternate currency used to pay those whose "profitable" actions can be repeated arbitrarily in a given interval. It takes no more effort to sell a million shares short than a billion, but (for example) an ear of corn cannot be multiplied effortlessly in a given interval. It seems to me that by paying the middlemen (who do not produce anything of real value) in the same coin as the farmer (who does), the farmer's money is devalued. Let me anticipate the "the middlemen would simply exchange their currency for the farmer's currency" reply by saying that in doing so, they would empower the farmer. After all, his currency is scarce, and the middlemens' currency is not.
I'm sure I'm an imbecile who doesn't understand the subtleties of Wall Street, but then again, evidence seems to suggest that so is everyone else.
Re:Oh, Linux, how you've forsaken us (Score:5, Insightful)
Freedom doesn't mean "just freedoms you approve of".
The best quote on the subject is from the OpenBSD camp:
"But software which OpenBSD uses and redistributes must be free to all (be they people or companies), for any purpose they wish to use it, including modification, use, peeing on, or even integration into baby mulching machines or atomic bombs to be dropped on Australia."
Theo de Raadt
cvs@openbsd.org mailing list, May 29, 2001
I'd go furthur - Man in the Middle Attack (Score:2)
It really comes down to a man in the middle attack.
The message is coming through that you want to buy shares, so some bastard in the middle buys them before you can get them and sells them to you at an inflated price.
I'll leave whether it is a level morally above or below using keyloggers to find credit card details as an exercise for the reader.
Re: (Score:2)
Nope, IBM, was around in Hitler's time. So IBM gear and consulting is what IBM used.
IBM - counting your Jews since 1933 [ibmandtheholocaust.com]
Re: (Score:2)
You'd rather see technology used for mass genocide than greed? Scratch that, if we find evidence, we're actually talking about time-traveling mass genocide. This could be serious.
Accuracy ? (Score:4, Informative)
I don't think that IBM will be pleased to be told that HP produced AIX!
Re: (Score:2)
I always thought hp unix's name was a vomit sound ...
Re: (Score:2)
What? Putting executables in /etc makes perfect sense.
Re: (Score:2)
ph/ux
Re: (Score:2)
Pure Greed! (Score:2)
It's sad to see how much money Wall Street firms were able to generate using this open source platform. We have yet to see what the open source communities get from these welches!
Wall Street (Score:3)
Development and administration at Fortune 100 companies in Manhattan is different than any other place I encountered, including other large companies. There is a lot of message-oriented middleware to patch together different systems.
You'd see a lot of strange stuff - a batch job printing from an IBM mainframe would be routed to the Unix print server, and be sent off to a junky old printer in some foreign country. Not always easy to debug when there is a problem.
Where I was, there were a ton of these old programs written in FORTRAN, COBOL and whatnot which had had business logic put in them for decades sitting on these modern IBM mainframes. Some of the business logic within it was probably lost long ago, it all just "worked", with a lot of the output routed to more modern equipment and technology. I guess they figure if anything ever goes wrong, they have almost unlimited money to throw at the problem so they don't worry about it.
You also have things happen. A business group has their developers write some program, it goes production on a machine or two, and then for whatever reason it generates a lot of money. Suddenly you have millions, sometimes even billions of dollars going over one production machine in a day. Everything happens so fast that it was never planned out to be scalable, and the main developer is too busy tweaking the program to make it make more money than to be scalable etc. If you're lucky, its market is closed during the week and you get to work on adding in additional levels of redundancy to the machine which suddenly has billions flowing through it every day. Despite the lack of planning, you better bet people will be flipping out if the machine goes down during the day, and the traders hear that their trades aren't going through due to "computer problems".
At the Fortune 100 financial I was at, Windows was considered a joke. Even the local head of the Windows team admitted that the Unix side was where things were really happening. It was just more flexible, focused on high availability and so on. With Linux coming in so much on the Unix side, that flexibility has only increased. I'm sure whatever RHEL or SUSE edition being run on most servers is so heavily modified internally by the various companies internal engineering teams, that it doesn't look like a RHEL or SUSE anyone here has ever seen. And RHEL and SUSE bend over backwards to get the business - which can be on tens of thousands, even hundreds of thousands of machines around the world.
Linux isn't their Master (Score:2)
They're still the master. Linux is their eager little pet, far more willing to learn new tricks than their old pet Solaris.
Set the exchanges to a clock. (Score:5, Insightful)
Re: (Score:2)
Better idea - add a low fixed tax on any stock trade, regardless of value or size. Just a $0.01 per transaction would make HFT extremely costly- if you're executing millions of trades per second, that quickly brings you up to billions of dollars per trading day. HFT can't be that profitable. Yet it wouldn't really affect people making actual investments - ones where you actually investigate the company to make sure it knows how to earn a profit.
Re: (Score:2)
Better idea - add a low fixed tax on any stock trade, regardless of value or size. Just a $0.01 per transaction would make HFT extremely costly- if you're executing millions of trades per second, that quickly brings you up to billions of dollars per trading day. HFT can't be that profitable. Yet it wouldn't really affect people making actual investments - ones where you actually investigate the company to make sure it knows how to earn a profit.
Yea, what a horrible idea. You'll realize how bad an idea that
Re: (Score:2)
One cent is effectively nothing on most stock transactions. Remember, that's regardless of shares transferred or their total value - selling 10,000 shares of Google's $500 stock (total value: $5M) would still get only a one-cent tax. Even small stuff, it's not a barrier - I could sell my ten shares of the now-bankrupt Circuit City for $0.04 (current price), and have made a one-cent profit after that tax (I bought it at $0.0021)
Hell, lower it to a tenth of a cent if you still think it's a problem. For millio
Re: (Score:2)
Sigh. An economic system is an implementation of fluid dynamics, or if you prefer complex adaptive systems (which amount to much the same thing in the limit.) What you are suggesting is tantamount to saying the ocean should be made of ice cubes, in order to avoid waves getting too big. Now that the tech bubbles around quants and HFT have been popped, and (important!) there are equally talented traders and programmers on both/all sides of the system, these are valuable tools for making the market more tru
Re: (Score:3)
So you make speed a disadvantage:
0.5% transaction fee on any and all trades, payable by the seller. No "short term" vs "long term" math to game, just a flat fee on the gross amount of any transaction of any kind.
It wouldn't affect real, long-term investment negatively at all; In fact it'd encourage stability by discouraging caching out (you take a 0.5% hit the moment you sell, even if you are taking a net loss, so it's in your best interest to hold for the long term).
It would however, completely destroy th
Re: (Score:2)
The transaction merely needs to be cheaper than the spread. In your example, if a 0.5% fee were applied to all sales, the "arbitrage opportunity" that HFT takes advantage of would instead require a 0.5% deviation (or is it half that, since the fee applies only to sells?), rather than a >0% deviation.
Re: (Score:2)
Also, what the hell do you mean by "greater rights"? You've used an awful lot of words (and grocer's apostrophes) to say nothing.
Re: (Score:2)
I think the lower capital gains taxes are there to encourage investment into businesses/economy/society.
That's the excuse, but there's zero science behind it. Even multi-billionaire Warren Buffett says, "I have worked with investors for 60 years and I have yet to see anyone -- not even when capital gains rates were 39.9 percent in 1976-77 -- shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off." [nytimes.com]
Capit
Re: (Score:2)
When the markets don't have enough friction, the money sloshes in and out of investments too quickly, and that makes it difficult for the people who want to use the money to build real things. Today, you have a million to spend on a new business project, tomorrow the million is no longer available and your project is canceled. All because investors changed their mind overnight and the stock ta
and Java on the software side? (Score:2)
well that seems retarded if you are so interested in speed. And I would think any of the *bsd's would perform just as well as linux and might be more secure too.
Re: (Score:3)
Re: (Score:2)
BSD doesn't shine on the high-end SMP machines. FreeBSD's website even has a warning about SMP and high loads, that it might seize up.
Now I prefer BSD on my servers, but they're not 8-way or more.
Re: (Score:2)
Faster, better, cheaper? (Score:2)
What occurs to me is that 15-20 years ago, when Sun iron dominated Wall Street, is that all the Sparcstations came IIRC with 10baseT on the motherboard, and I don't recall there being faster NICs available. And even if there were, in a lot of cases all the machines slots were populated with graphics cards.
Then three things all sort of happened around the same time: Linux (kernel and user land) reached a level of maturity and stability, inexpensive 100baseT and later 1000baseT NICs became available, and Inte
Yes, we are heavily linux (Score:4, Informative)
We are doing a lot of Java these days. The JVM's are much improved. It is very easy to write large heavily multithreaded Java apps to replace the our large C++ distributed systems. The Java development, build, debug, and deployment tools are great.
One can spend time arguing the merits of C++ vs Java. The reality is in most cases the C++ development time is slower, and the coding patterns used do not produce code that is faster than Java. C++ development and deployment across different platforms is a pain.
Nothing to brag about. (Score:2)
Big Iron vendors gave cred to Linux in Finance (Score:2)
Oracle/Sun: solaris or linux on your Oracle x86 box. Unbreakable Linux for Oracle.
HP: Redhat and SuSE were supported on Integrity servers (not to be supported on the new 9300, but that's an
Show me the code. (Score:2)
Linux also offers financial firms the ability to modify the source code to further speed performance.
So does anyone have a link to any source code that was made open under the license? They may be taking our money, but at least they are giving us code, right?
Re: (Score:3)
The GPL only requires you that you distribute the source code to those that have received the binary. So, if you modify GPL code for personal use, and do not distribute the binary, you're not required to distribute the source code.
Re:Really? (Score:5, Insightful)
Yeah, they must have chosen it because it was free, even though they cite the fact that it was the best solution to their needs because of the lower latencies compared to alternatives and because of its flexibility.
Since when do people like you bring a relevant argument to the table? Oh, that's right. You're an AC.
Re: (Score:2)
Re: (Score:2)
Funny you should mention this. The very first hack that I ever heard of, back in the early 1970s (yes, I'm that old) was purportedly done to what is now Citibank in the mid-late 1960s. This was when they had one of the first IBM 360 machines - the standard mainframe (about the same power as a PC/AT). The guy who wrote their loan computation program wrote self-modifying code. When the program ran, it stored various constants in various places in memory, that happened (when these constants were all strung
Re: (Score:2)
Second this
ZeroMQ is magic, and very easy to use.
Even better, use it to split loads between servers, processes, etc
Only downside I've seen is that some messages are still mysterious, so if you get a weird assert popping up, just google it (yeah, I know you would do it anyway)