I know it's been tried many times unsuccessfully, but with the benefit of hindsight now would you have preferred to pay a nominal annual fee for the handful of currently free services that you really like?
I realize we're likely too far gone now, but it's fundamentally an issue that we aren't paying for these ad-supported services, so the companies gravitate toward serving the interests of the entities that are paying them.
That's not a justification or reflection of my opinion about privacy and ethics around the use of data, just a thought around removing the problem from the equation all together.
I guess my real question is, if you remove the profit seeking component of the data discussion does the bad behavior completely go away? Definitely interested in other opinions.
A couple of other things I’ve found help me in case they help you:
- public speaking is a skill, not a talent. You can learn to be good at it with practice.
- if you are the type of person that gets nervous, you may never completely cure that, but you will learn to get through it. Many good public speakers still feel a little anxiety before speaking.
- if you have a bad presentation, don’t stress too much. The key is to not let too much time go by after a bad performance, get back out there.
I personally dread public speaking, but I have to do it regularly enough that I continuously have to work at it. I like to memorize the first few lines of any talk. Once I get a few sentences in everything falls into place. I just need to get through the first 90 seconds before my nerves pass. And it only improved through live action.
You're probably correct here. The part people find a little unsavory is not that it's somehow eroding the middle class. It's the idea that HFT can act as an unnecessary intermediary, essentially taxing a transaction that otherwise didn't need to be disrupted and at scale the amount extracted becomes material.
Imagine your neighbor owned a Ferrari and you told him one day you were going to buy a gallon of milk at the store. "On sale for $3.99!" you say to him. Now imagine he sped past you on your way to the store and when you arrived there he had bought all the milk at $3.99 and was selling it in the parking lot for $4.01.
You wouldn't necessarily be ruined financially paying $4.01 instead of $3.99. The cost is negligible. But you would probably think he was kind of a jerk.
That analogy is tempting but inaccurate. Pretty popular with the Mike Lewis "the market is RIGGED against the LITTLE GUY and we're all MAD AS HELL" crowd, but in the end it's hyperbole. IEX is not for the little guy. IEX is for the really big guy. Institutional investors. They are tired of having the market run away from them on large orders.
A closer analogy would be that the neighbor is the owner of the local supermarket and you have recently announced that you were going to buy all the milk in the region. You go to one local supermarket (not his) first and buy out the entire stock of milk. On your way to the next one (his), he raises the price of milk to $4.20, knowing that your increase in demand is going to drive up the price everywhere and he doesn't want to be the idiot that sold you milk at $4.00/gal and will have to resupply at $4.20, losing 20 cents per gallon on that sale. When you get there your realize that the price of milk has gone up, and you yell and scream and stomp your feet, but you buy the milk anyways, because you have high demand for milk. The supermarket owner is not a jerk for responding to the increased demand for milk, but many people see it that way.
So maybe your a really rich guy who can afford a lot of milk, and so you lobby the government to restrict the ability of supermarket owners to talk to each other, maybe they have to wait a day or something. The supermarket owners are just going to respond by increasing the price of milk on average, because there are random milk thirsty people coming through every once in a while buying up all the milk, increasing the price, and they need to increase the milk premium so they can afford to resupply. They need to compensate for that risk. For that reason everybody loses out. Less people are going to buy milk due to increased prices, so that's bad for the store owner, and milk buyers are going to have to pay a higher price.
Same thing is going to happen at IEX. There is simply going to be a wider bid/ask spread.
Yours was the comment that made me understand how the spread economics described elsewhere in this thread worked, thanks for that. The average price increase in the absence of the HFT bids was the part that made it click.
That said, it should be mentioned that the "rich guy"/"institutional investor" includes various pension funds.
"In a letter urging the SEC to approve IEX as a full exchange, the Teacher Retirement System of Texas, a pension fund that manages more than $125 billion, suggested that trading through IEX could save the system millions of dollars a year."
This is not how it works. It's more like he sees you buy one gallon of milk at 399 then decides to go buy others. He has NO idea if you're going to buy it or not. He's taking a risk.
What your described is more like real front-running: A customer places an order, the evil broker sees it and goes out in front to buy for himself then gives the customer a lower price.
Your buddy in the Ferrari reliably making money requires him to be able to properly predict. AND you're missing the other side of the trade! The poor shopkeep that priced at 399 when you were OK paying 401. Why should he lose out?
Your intuition about financial markets does not match reality. In financial markets no one knows that you want to buy a gallon of milk (or a share of stock) until your bid has already been submitted. No matter how fast their Ferrari, there is no way for them to get in line ahead of you at the store.
Well, there is in a matter of speaking. To take the analogy further, imagine not buying a gallon of milk but 100,000 1 gallon can of milk.
The guy with the Ferrari wouldn't be able to get in front of you at the next door target but they'll loot the most convenient Walgreens, Safeway, Walmart, and Amazon Prime.
Of course, the analogy no longer holds for numerous reasons (100000 gallons of milk, driving around, buying from the farms directly) but the point is the Flash Boys work on the likelihood of such an event happening which, believe it or not, is fairly common in the stock markets these days. Think, mutual funds, ETF managers, etc. This is now, largely, considered the cost of doing business.
If you want to by 100,000 gallons of milk you don't have a god given right to do so at the currently posted prices in every grocery store in town. Those grocers are well within their rights to raise prices as soon as they figure out what you're doing.
The grocers' price is irrelevant to the discussion here.
The guy with the Ferrari would still outrun you and offer you a new price, with a margin just enough for them to be profitable, yet not substantially large as to talk you out of the deal altogether.
Yeah, so if you're not a fucking idiot, instead of taking out a front page newspaper ad announcing to the world that you want to buy ALL THE MILK.
You should instead send 4 or 5 trucks to each location and buy the available milk, the guy in the Ferrari cannot outrun you because you're already there, and your order filled before he even got there.
Now imagine that you have at your finger tips a giant constantly updating database to the nearest millisecond about how much milk there is at every grocery store, but you still decide to take out a front page ad and announce your plans in advance, instead of breaking up your order into multiple parts and sending each to its own store. If you did this, everyone would laugh at you like they are at IEX and Capital Group.
Like I said in the original comment, it is pointless to get bogged down in the analogy because it doesn't reflect the truth accurately. However, you guys are continuing down the path an down-voting a perfectly legit argument.
The purpose of an analogy is not to maintain fidelity to the original scenario but to simplify it to convey the point of author (otherwise it ends up getting as complicated as the scenario). The analogy is only a coarse approximation of the actual scenario, a best-effort attempt to drive the point across.
I'm disappointed with the unreasonable down-votes and the explanation provided.
On the contrary, the grocers' prices are the very heart of the matter. You see, the Ferrari neighbor may be HFT, but so are the grocers. And every grocer wants to sell their goods at a newly-higher price if they get wind of a big buyer, because it will cost them more to restock if you buy everything. So they will naturally raise their prices. If you buy from the grocers one at a time, expect them to call the other stores (ok it's a chain grocery) to alert them. You will pay a lot for your last milk purchase, unless you stop buying because the asking price has gone too high. If you instead have milk trucks make synchronized purchases across town, you will pay the same price everywhere, and all of the grocers will be upset once they realize what happened. If you do the synchronized milk truck plan enough, the grocers may permanently raise their milk prices at the expense of losing a few other price-conscience buyers.
In reality, this occurs i the stock market because the "national market" consists of something like 15 different exchanges in a big distributed system, so there are race conditions. HFT market makers trade on all of the exchanges, and adjust their prices based on trading demand seen from other exchanges. They spend a lot of money on fast networks between the exchanges, so that they can be/beat the proverbial ferarri. But synchronized trades a la tgemilk trucks or Katsayuma's "Thor" cannot be raced against.
IEX is intended to partially commoditize the Thor approach: take the advantage away from the grocers (HFT, market makers) and give it to the big milk buyers (institutions like hedge funds and pension funds). Retail trading is not affected one way or another.
There is still a margin if the intended buyer was willing to pay more or would just want to buy the milk at whatever price offered. Of course, the grocers could keep raising the price arbitrarily but there is still a delta that the guy in the Ferrari could overcharge.
I think you understand the point we are trying to get across but just trolling it. I'd have appreciated an honest discussion rather than a trolling attitude.
The situation I'm describing is literally what happens in the real world. If a large trader wants to buy a big block of stock such that he can't fulfill the order on a single exchange he has to be pretty careful about how he executes the trade or the market will move against him. As soon as he purchases all the stock at the market price on a single exchange those selling stock on other exchanges will raise their prices.
It's very important to understand this. The price doesn't (generally) rise on other exchanges because someone swoops in and buys up all the supply. It rises because the people who were selling in the first place change their offers.
Ohh there is a way to do it, and it is a show on 60/60. I think to be specific, there is a delay between NJ switch to Wall st, so some ppl tap in the switch in NJ, know what you plan on to order, then make their order use a different route to wall st... this was well documented. I dont know if it still exist though.
This is the complete opposite of what is happening.
What you're describing is straight up hacking, and if there was as clear of a breach of the law like that, we wouldn't be having civil discussions about whether HFT is good or not.
Besides, almost nothing routes to Wall Street anymore. Especially not for stocks.
NASDAQ's trading platform is in Carteret, NJ.
NYSE's trading platform is in Mahwah, NJ.
Most HFT firms, if they're not already colocated in Carteret or Mahwah, are located in Secaucus, NJ.
Maybe you should read "Flash Boys" then.
They can and do.
Orders start at one place, and by regulation then can get sent to many other markets. If you can go to those next markets a little faster, you can front run the order.
Flash Boys uses a totally fabricated use of "front running". It's worse than people that call copyright infringement "theft". That book is probably one of the worst books I've read as far as accuracy goes. At least that I'm aware of.
Seriously, at one point, Lewis suggests that the trading station of some big trader is hacked. That just by typing numbers without submitting an order, stuff jumps. This should send huge red flags off on anyone that's even remotely familiar with anything similar to a computer. But it's another "see how rigged it all is?" anecdote blended in with his nonsense.
Some programmers don't understand latency, so there's no hope for anyone who's not familiar with software development to wrap their head around the concept of "yes, things happen in milliseconds".
Which makes it all the more easier to get away with anything that sounds as sensational as this.
I've discussed this topic with people in the past and I've heard one option is to find a family owned business that does not have a clear successor. In that scenario you can sometimes find a healthy, well-run business that is owned by people who need an exit strategy and are open to selling so they can retire.
Is this maybe a "sell high" scenario for twitter? Sounds like the article is suggesting that, while demand is still strong, the supply of available office space is rising.
Perhaps their thinking is to get the asset under lease while the price is still at it's current rate and then spend on expansion later if it's necessary (at theoretically lower prices based on the supply trend?).
The current tech boom started around 2011-2012, and a lot of companies signed multi-year leases around that time. My company leased an office for 5 years in 2012, and our lease will expire in early 2017. We expect the price to increase substantially, and we are considering moving the office to save some money.
I suspect a lot of 5-year leases are going to be ending this year, and a lot of companies will be looking for new space. If Twitter might as well get a piece of the action, if they aren't using that part of their building.
They're definitely doing the math, but to an objective outsider the numbers won't add up. We are all likely underestimating how hard it is to innovate inside a company the size of Walmart.
I have a theory about this, it happened to us when we bought some childrens books on Jet. They came in the mail from Barnes and Noble with a packing slip that had a price higher than we paid included with it.
It doesn't explain the Amazon example you mentioned, but I was under the impression they have special affiliate arrangements with 3rd party retailers and that they were somehow being allowed to invest their affiliate commissions into the consumer (which is typically not allowed).
So if they're making 15% affiliate commissions from B&N they're able to drop the consumer price 10%. They've been focused on scale more than margin since day 1, so it would make sense that they would just operate on something razor thin and continue to drive home that they have unbeatable prices.
For the 3rd party retailers it's a way to compete with AMZN on price without actually having to drop their prices and I can see how that would be attractive to a retailer that's losing market share.
I realize we're likely too far gone now, but it's fundamentally an issue that we aren't paying for these ad-supported services, so the companies gravitate toward serving the interests of the entities that are paying them.
That's not a justification or reflection of my opinion about privacy and ethics around the use of data, just a thought around removing the problem from the equation all together.
I guess my real question is, if you remove the profit seeking component of the data discussion does the bad behavior completely go away? Definitely interested in other opinions.