Tag Archives: wall street

IBM Is Not A Tech Company

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IBM’s revenues are declining because there’s a big shift going on in the way companies are buying tech. Instead of buying their own software and hardware for their own data centers, then hiring expensive consultants to stitch it all together, they are renting that technology, which is often hosted elsewhere. That’s called “cloud computing.”

All the big tech firms are shifting from the old way of selling stuff to this new way with varying degrees of success: SAP, Oracle, Microsoft, Dell, HP and IBM are all getting into the cloud.

via Mark Cuban: IBM Is Not A Tech Company – Business Insider.

What Michael Lewis Gets Wrong About High-Frequency Trading

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The idea that retail investors are losing out to sophisticated speed traders is an old claim in the debate over HFT, and it’s pretty much been discredited. Speed traders aren’t competing against the ETrade guy, they’re competing with each other to fill the ETrade guy’s order. While Lewis does an admirable job in the book of burrowing into the ridiculously complicated system of how orders get routed, he misses badly by making this assumption.

via What Michael Lewis Gets Wrong About High-Frequency Trading – Businessweek.

An Adaptation From ‘Flash Boys: A Wall Street Revolt,’

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The trouble with the stock market — with all of the public and private exchanges — was that they were fantastically gameable, and had been gamed: first by clever guys in small shops, and then by prop traders who moved inside the big Wall Street banks. That was the problem, Puz thought. From the point of view of the most sophisticated traders, the stock market wasn’t a mechanism for channeling capital to productive enterprise but a puzzle to be solved. “Investing shouldn’t be about gaming a system,” he says. “It should be about something else.”

via An Adaptation From ‘Flash Boys: A Wall Street Revolt,’ by Michael Lewis – NYTimes.com.

The same system that once gave us subprime-mortgage collateralized debt obligations no investor could possibly truly understand now gave us stock-market trades involving fractions of a penny that occurred at unsafe speeds using order types that no investor could possibly truly understand. That is why Brad Katsuyama’s desire to explain things so that others would understand was so seditious. He attacked the newly automated financial system at its core, where the money was made from its incomprehensibility.

Update:  For some highly technical information on High Frequency Trading I was pointed to this set of articles from ACM, Association of Computing Machinery.

Firms race to transmit Wall Street data at nearly light speed

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Through a series of microwave towers, the dish beams market data 734 miles to the Chicago Mercantile Exchange’s computer warehouse in Aurora, Ill., in 4.13 milliseconds, or about 95% of the theoretical speed of light, according to the company.

Fiber-optic cables, which are made up of long strands of glass, carry data at roughly 65% of light speed.

via Firms race to transmit Wall Street data at nearly light speed – latimes.com.

How Does the Tesla Model S Fire Risk Compare to Gasoline Cars?

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Since the Model S went into production last year, there have been more than a quarter million gasoline car fires in the United States alone, resulting in over 400 deaths and approximately 1,200 serious injuries (extrapolating 2012 NFPA data). However, the three Model S fires, which only occurred after very high-speed collisions and caused no serious injuries or deaths, received more national headlines than all 250,000+ gasoline fires combined. The media coverage of Model S fires vs. gasoline car fires is disproportionate by several orders of magnitude, despite the latter actually being far more deadly.

Reading the headlines, it is therefore easy to assume that the Tesla Model S and perhaps electric cars in general have a greater propensity to catch fire than gasoline cars when nothing could be further from the truth.

via The Mission of Tesla | Blog | Tesla Motors.

Qualcomm hit with $173M patent verdict—but plaintiff is the real loser

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Nine-digit verdicts don’t happen every day. A $173 million windfall—especially when no other revenue sources seem forthcoming—would have most investors in a small company like ParkerVision jumping up and down. But that didn’t happen. “Were Investors Set Up To Fail?” asked one writer on investment site SeekingAlpha. He quotes a JP Morgan Chase analyst telling clients that just a week ago, ParkerVision was in a position to win up to $2 billion.

via Qualcomm hit with $173M patent verdict—but plaintiff is the real loser | Ars Technica.

Barbarians at the Gateways

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The goal of this article is to introduce the problems on both sides of the wire. Today a big Wall Street trader is more likely to have a Ph.D from Caltech or MIT than an MBA from Harvard or Yale. The reality is that automated trading is the new marketplace, accounting for an estimated 77 percent of the volume of transactions in the U.K. market and 73 percent in the U.S. market. As a community, it’s starting to push the limits of physics. Today it is possible to buy a custom ASIC application- specific integrated circuit to parse market data and send executions in 740 nanoseconds or 0.00074 milliseconds.4 Human reaction time to a visual stimulus is around 190 million nanoseconds.

via Barbarians at the Gateways – ACM Queue.

By 2005, most shops were also modifying kernels and/or running realtime kernels. I left HFT in late 2005 and returned in 2009, only to discover that the world was approaching absurdity: by 2009 we were required to operate well below the one-millisecond barrier, and were looking at tick-to-trade requirements of 250 microseconds. Tick to trade is the time it takes to:

1. Receive a packet at the network interface.

2. Process the packet and run through the business logic of trading.

3. Send a trade packet back out on the network interface.

To do this, we used realtime kernels with bypass drivers (either InfiniBand or via Solarflare’s

Goldman Sachs employees concerned Bloomberg news reporters are using terminals to snoop

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Goldman later learned that Bloomberg staffers could determine not only which of its employees had logged into Bloomberg’s proprietary terminals but also how many times they had used particular functions, insiders said.

via EXCLUSIVE: Goldman Sachs employees concerned Bloomberg news reporters are using terminals to snoop – NYPOST.com.

I doubt this will end well for some people.

Someone could have just made a ton of money hacking the AP’s Twitter account

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Algorithmic trading bots react instantaneously to keywords in news reports and even tweets, which is likely why the market fell so quickly. Stocks started to recover about three minutes later but took seven minutes to return to their earlier levels.

via Someone could have just made a ton of money hacking the AP’s Twitter account – Quartz.

Mark Cuban: Facebook Is Driving Away Brands – Starting With Mine

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“We are moving far more aggressively into Twitter and reducing any and all emphasis on Facebook,” Cuban says, via email. “We won’t abandon Facebook, we will still use it, but our priority is to add followers that our brands can reach on non-Facebook platforms first.”

via Mark Cuban: Facebook Is Driving Away Brands – Starting With Mine.

“The big negative for Facebook is that we will no longer push for likes or subscribers because we can’t reach them all. Why would we invest in extending our Facebook audience size if we have to pay to reach them? That’s crazy.

The original link has a few programming problems but the article can be read after hitting the stop button on your browser.