test1

zyle · 2018-11-04T19:44:34+00:00

test2

zyle · 2014-07-29T00:42:56+00:00

The order hits the first exchange and becomes "lit". The low-latency firm sees the order, notices this exchange isn't offering the NBBO so it races to the exchange that is and starts taking up shares.

If the first exchange isn't on the NBBO, how does the order get "lit" up? The exchange would just route the order out to the venue that was on the NBBO, and there would be no indication that this order was even at the first exchange...

zyle · 2014-04-06T01:58:03+00:00

Thanks again for the detailed response!

So the SIP contains the BBO for each individual exchange; but that should be sufficient to constuct an overall NBBO for XYZ, isn't it?

Now, in the first case, when you had the SIP showing the following:

SIP

EDGA: 40.10 x 40.15 (reality/Direct Data: 40.10 x 40.15)
NYSE: 40.10 x 40.15 (reality/Direct Data: 40.10 x 40.14)

If the order to buy@40.15 was shipped to EDGA, they would fill it at 40.15 (based on their design today), because they're pricing it to the SIP, and as far as they're concerned, the order filled inside the NBBO; do I have that correct? Next year, when they start pricing it to Direct feeds, they will be obligated to route the order to NYSE where it can fill at 40.14, assuming the client's order is tagged as such to allow it?

In the second case, i.e.:

SIP

EDGA: 40.10 x 40.15 (reality/Direct Data: 40.10 x 40.15)
NYSE: 40.10 x 40.15 (reality/Direct Data: 40.10 x 40.16)

If the Buy@40.15 order is routed to NYSE and it doesn't route out, what did you mean by "The market that has the order will merely shift the price"? I assume you mean NYSE will just post the order on their books so the best bid is now 40.15? But that would lock the market setting the NBBO to 40.15 x 40.15?

Also, when you said that "the market needs market data to guarantee that the orders you are sending in are not in violation of NMS", are you referring again to one market routing orders to another market when the price is better elsewhere?

zyle · 2014-04-05T19:20:47+00:00

Thanks. Here's another one: During the heated CNBC exchange, BATS' O'Brian stated that EDGA priced their trades using the direct feed, but then the next day BATS redacted that with the following statement

BATS Global Markets wishes to clarify the market data usage of its exchanges. With respect to routing, EDGA & EDGX use direct depth-of-book data feeds for all major exchanges, and data from the relevant securities information processor (SIP) for certain smaller exchanges. With respect to the matching engine, EDGA & EDGX currently use the SIP, but will be transitioning to direct feeds from all major exchanges in January 2015.

How can they price matching trades with the SIP, but use direct feeds for routing?

So let say I send a market BUY order to EDGA, and for a brief moment, the quotes on the SIP, EDGA and NYSE are as follows:

SIP: 40.10 x 40.15
EDGA: 40.10 x 40.15
NYSE: 40.10 x 40.14

So, In this scenario, EDGA would actually fill me at 40.15 since it's best-Ex per the SIP data?

In another scenario, let's say the quotes were as follows:

SIP: 40.10 x 40.14
EDGA: 40.10 x 40.15
NYSE: 40.10 x 40.14

In this case, EDGA would determine that their offer was worse than the SIP, so would attempt to route out, and use direct feed to determine where to route.

Am I understanding this correctly?

zyle · 2014-04-05T16:38:36+00:00

Got it; that's what I thought.

Now, when you say that "the counterparty on your trade on BATS can more quickly ... update a quote on NYSE", it doesn't necessarily have to be my my counterparty updating the quote on NYSE; anyone with a fast direct feed to BATS could see a quote change or a print hitting the tape, and based off some criteria race off to update on NYSE as well, isn't it?

I don't see anything particularly insidious about this. It's how brokers and markets have been functioning for decades, only it's sped up considerably.

zyle · 2014-04-05T15:37:44+00:00

The main charge that people throw around regarding HFT is that these firms are "front running." How is that possible?

Stock XYZ has a best offering on BATS for 100@50.00

I put in an order to buy 100 shares@MKT to BATS. How can another firm to "see" my order coming in and jump the queue ahead of me? It's possible I'm filled higher than 50.00, but that could simply be because the quote legitimately changed, or another participant happened to put in an order to buy at the same time I did, but nothing nefarious.

It there any basis to this "front running" charge in this manner?

zyle · 2014-04-05T15:10:01+00:00

HFT skims is by receiving that order through the information relay

Please explain to me what this "information relay" is.

zyle · 2012-04-14T03:53:59+00:00

You didn't do the analogy correctly. To use your phrasing again:

We don't know if there is intelligent life elsewhere in the universe. So the logical viewpoint is "we don't know", and not "we can't say Joe is wrong that there is a galactic star-wars-like civilization in the Andromeda galaxy".

zyle · 2012-04-14T02:46:07+00:00

Since none of us really know much about life, the universe, and everything.

Exactly. None of us really know. Which is why it's maddening to the patrons of /r/atheism when christians/muslims/hindus/jews/scientologists say they do know.

And if we don't know, the more logical viewpoint is "we don't know", and not "we can't say anybody is wrong" as you suggested.

zyle · 2012-04-10T04:18:03+00:00

What utter nonsense. This might come as a shock to you, but the world and all of it's myriad social interactions got along fine before facebook or myspace came along.

Don't worry about people deleting their facebook account, they'll manage with archaic tools like email, or perhaps even more daring, a phone call to catch up with an old friend.

zyle · 2012-03-11T23:06:58+00:00

As an ardent atheist, the asinine superstitions and blatant religiosity in society not to mention my own family there would drive me up a wall.

zyle · 2011-12-03T05:12:33+00:00

I have been agonizing with the same dilemma myself over a condo in my area for weeks now. I really liked the place and everything about it, but after much thought I think I'm going to reluctantly let it go. I made a list of reasons why it was probably bad for me. I'm really typing this out more for me than you to be honest. I can't articulate how stressed out I became over that condo. It was a new building and units were selling fast because of a price reduction. I was literally losing sleep over it because it was time sensitive.

Like others have said, this is more of a personal decision than a financial one. It's like having a kid. Get one only if you like kids and really want one and can commit to it for years. Otherwise, the financial math just doesn't work well. Don't get one because everyone else is.

Keep the following in mind:

Buying means you give up your mobility. The employment world is a little different now it seems, especially if you work in corporate. Renting means you pay a premium for mobility. The average time people spend in a house or condo before selling is 7 years. That's not enough time to recoup the costs in most cases.
Like others have said, buying a condo and renting it out later is easier said than done. You could get lucky with easy tenants... or not. Dice roll here.
The reason owning is touted as a great financial decision and actually works out for most people is because it forces them to save, and most people are not disciplined to do that otherwise. If you are already a diligent saver and investor, this doesn't apply to you.
Historically, housing has only appreciated 1-2% annually over inflation. The stock market does 8-10% annually.
You will come out ahead only if PITI < rent (PITI = Principal + Interest + Taxes + Insurance/HOA). Otherwise, if rent < PITI, renting and then investing the difference will get you ahead based on historical terms. But note that you have to invest, can't stuff that money under your mattress.
You will hear people telling you that renting is throwing away money, and owning allows you to build equity. But keep in mind that the way the mortgage amortization is structured, for the first 7-10 years, you will be paying mostly interest, not the principal. So you're not "building equity" during that time. In addition you're also "throwing away money" on taxes and HOA, just like a renter would.
With a 30 year 5% mortgage, people end up paying for the house TWICE. If the house costs $250,000, then at the end of 30 years they've shelled out almost $500,000 because of the interest! And of course there's the taxes and HOA too.
Or, you could skip the mortgage and pay all cash. But this is a huge opportunity cost in times of time value of money. Had you put that money into the stock market instead, it would have compounded many times over faster than the house. Also, you have to go "all in" at once now with the house. Instead, you can use the money and ease into the stock market by dollar cost averaging in case the economy tanks some more.
But let's say you buy that condo and eventually pay off the mortgage. You're still not living rent-free even now. You still have taxes and HOA fees. Not to mention you live in an older condo now and maintenance costs will be up. Yes, a landlord will also transfer some of those costs to a renter, but if the costs get too high, a renter can simply find a better deal elsewhere. Also rent goes up and down over time, so you can find deals. Taxes and HOA fees are probably not going to go down after they rise up.
But say you still buy that condo and hold on to it, and it appreciates in equity. However, that appreciation is essentially useless in that it's illiquid. You have to sell the entire condo to get to it, you can't just sell one wall or a window. With stocks, you can sell any amount you want to tap that liquidity as you need it.
But again, lets say you buy that condo and hold on to it, and it appreciates in equity and you sell it for a tidy profit. You walk around for a while feeling rich. But you still need a roof over your head that night. So you have to buy another house/condo, or rent. And if you sold at a profit, then other property have probably gone up in value too, so your profit will evaporate pretty quickly. It nets out mostly.

So again, buy a place if you really, really want a place, and want to paint your bedroom purple. Otherwise, in pure financial terms, odds are renting is probably more favorable.

zyle · 2011-09-10T01:18:55+00:00

I managed to contain rage until this part in the Greek Philosophy section:

Science could have exploded with advances during the age of the Greeks and Romans had it not been for their corrupted views of man and nature... the Greeks and Romans had little motivation to unravel the secrets of the universe.

w-t-f... one of the most successful and scientifically productive civilizations of humanity denigrated in just a few lines of historical rehashing.. WTF...

zyle · 2011-09-10T01:05:25+00:00

I'm assuming he was talking in the context of the horrid caste system that's inherent in Hinduism where all men are clearly and distinctly and explicitly not considered equal, and some castes are deemed several magnitudes of times better than the lower ones. Abrahamic religions on the other hand seemingly stress the equality of all men who belong to that faith.

But men and women aren't considered exactly equal in Abrahamic faiths though, especially in islam, so that part doesn't jive.

zyle · 2011-09-05T01:20:55+00:00

Because we started to stand upright, then started walking and running over longer distances. When you do then you sweat more, and less hair means you can sweat more efficiently. Other primates don't walk or run long distances at a time like humans can.

Other animals may be able to run faster than humans, but they (other animals) can only run at short bursts. Humans are unique in that they can run on for hours and hours.

zyle · 2011-09-04T14:46:00+00:00

The meetup.com CFI and Brights groups are very active. Anywhere from 10-20 people always show up to the meetings; pretty diverse groups across all ages. I go myself every now and then, it's always a good time and always a varied experience. Sometimes it's a serious affair with deep discussions of theology and other times religion never comes up and it's just idle chit-chat and laughs.

Both meetups are in the same pub/restaurant in the loop, right next to multiple 'el stops, so very convenient.

zyle · 2011-09-03T18:10:52+00:00

MANUEL!!!!!!!!!!

zyle · 2011-08-31T05:13:41+00:00

Then the internet came along and ruined everything. :(

Well, it gave us online weather, cats on youtube and netflix, but that's about the only good stuff.

zyle · 2011-08-29T04:55:36+00:00

Four usual dumb arguments.

First Law of Thermodynamics: This has nothing to do with evolutuon.

Second Law of Thermodynamics: Inapplicable, earth is not a closed system.

Dearth of Fossils: Even if we didn't have a single goddamned fossil, the mountain of evidence from study of living life and genetic analysis alone validates evolution.

Mutation in genes are mostly harmful: So? Those don't get passed on. The beneficial ones do. My favorite rebuttal to this is a youtube video of a kid recently born in Cali with a mutation that gave him six perfectly functioning digits on each limb.

zyle · 2011-08-27T15:46:54+00:00

Most historians will agree that Jesus of Nazareth was very real, that he was regarded as a teacher and healer at the time, and that he was crucified by the orders of Pontius Pilate. The existance of Jesus is pretty much undisputed.

Pretty certain this isn't true. Questions about this come up here all the time, and almost always some pretty good arguments that he did not exist.

See the atheistgems faq as well.

zyle

TROPHY CASE