China Clamps Down on High-Speed Traders, Removing Servers (yahoo.com)
- Reference: 0180600046
- News link: https://tech.slashdot.org/story/26/01/16/1526243/china-clamps-down-on-high-speed-traders-removing-servers
- Source link: https://finance.yahoo.com/news/china-clamps-down-high-speed-013817033.html
> China is [1]pulling the plug on a key advantage held by high-frequency traders, removing servers dedicated to those firms out of local exchanges' data centers, according to people familiar with the matter.
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> Commodities futures exchanges in Shanghai and Guangzhou are among those that have ordered local brokers to shift servers for their clients out of data centers run by the bourses, according to the people, who said the move was led by regulators. The change doesn't only affect high-frequency firms but they are likely to feel the biggest impact. The Shanghai Futures Exchange has told brokers they need to get equipment for high-speed clients out by the end of next month, while other clients need to do so by April 30, the people said.
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> The clampdown will hit China's army of domestic high-frequency firms but will also impact a swathe of global firms that are active in the country. Citadel Securities, Jane Street Group and Jump Trading are among the foreign firms whose access to servers is being affected, the people said, asking not to be named as the matter is private.
[1] https://finance.yahoo.com/news/china-clamps-down-high-speed-013817033.html
the most dangerous street in the world wall st! (Score:2)
the most dangerous street in the world wall st!
Good. (Score:5, Insightful)
Now we need to do the same here. They offer nothing of value, they are skimmers.
Re: (Score:2)
This is for sure.
HST looks and feels like cheating.
Re: (Score:2)
Tax each trade they make.
Re: (Score:2)
Good, but this is not enough. The only way to stop the high speed traders is to insert random delays in trades. Otherwise, it just means whoever gets the lowest latency connection to point of transaction gets to skim.
There is a reason for in-exchange HFT servers (Score:1)
It allows fairness between brokers.
If brokers have to put their servers outside of the data center, it gives an advantage to those whose servers are "close by" as the data-packet travels.
There are ways to overcome this advantage by using long runs of fiber to compensate, but if the overall goal is to discourage high-frequency trading I don't think the Chinese Government is going to do anything to encourage fairness here.
Re: (Score:2)
How about forcing a random delay in the system?
Lack of information.... (Score:2)
I think the better solution to HFT is to "batch" trades - sells get posted blind over the space of a second, they're revealed and there's a second of quiescence to allow everyone everywhere to see the sells, blind buys get posted in the next second, in the fourth second buys and sells are matched and in the fifth second the results are posted. Naturally, one might parallelize this so there's always five sequences in flight.
Because the buys are "blind" (buyers don't have any visibility into what other buyer
Stupid (Score:2)
These same firms will continue to be high speed traders, it will just be at a lower speed. They are not outlawing the techniques, just the technological advantages.
It is still a race even if it is done on foot rather than in an automobile. The normal, every day person operates at so much slower speeds that even without the specialized equipment, the firms will have a very similar advantage.
Also, it is practically impossible to outlaw the techniques.
Duh ... (Score:2)
... removing the barriers to entry created by HST levels the playing field.
Your own analogy illustrates the point: racing on foot is a lot cheaper than racing automobiles, which is one reason why you have so many people running in races and so comparatively few driving in them.
Re: (Score:2)
How about requiring all bids to be posted for five seconds before closing? How fast can a human trader respond?