Comments on: Sergey Aleynikov, Idiotic Moron http://www.aleablog.com/sergey-aleynikov-idiotic-moron/ Alea Jacta Est Wed, 03 Mar 2010 18:43:34 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: jck http://www.aleablog.com/sergey-aleynikov-idiotic-moron/#comment-3327 jck Tue, 14 Jul 2009 11:44:55 +0000 http://www.aleablog.com/?p=4003#comment-3327 I don't think "front running" is the issue here. Basically, HFT is a type market making that exits because of the multiplicity of electronic trading venues. A large firm with customer order flow would be in a position to know if an order on the NYSE is firm not unlike a specialist in old days and could use that information to put orders on other platforms in order to facilitate the trade, that's not illegal. If you deal on an exchange you always "pay" a specialist or maker maker and the question is whether technology (i.e. HFT) has cut prices vs NYSE specialists. Obviously if your property is stolen you want to claim maximum damage, but I doubt that the code has much value to anybody other than GS, I see this more has a pre-emtive move, deterrent and good chance that it will backfire, because if you are genius coder you don't need GS, they are numerous alternatives and they pay better. BTW, I don't know anybody who regards GS as top in the HFT space. I don’t think “front running” is the issue here. Basically, HFT is a type market making that exits because of the multiplicity of electronic trading venues. A large firm with customer order flow would be in a position to know if an order on the NYSE is firm not unlike a specialist in old days and could use that information to put orders on other platforms in order to facilitate the trade, that’s not illegal. If you deal on an exchange you always “pay” a specialist or maker maker and the question is whether technology (i.e. HFT) has cut prices vs NYSE specialists.
Obviously if your property is stolen you want to claim maximum damage, but I doubt that the code has much value to anybody other than GS, I see this more has a pre-emtive move, deterrent and good chance that it will backfire, because if you are genius coder you don’t need GS, they are numerous alternatives and they pay better. BTW, I don’t know anybody who regards GS as top in the HFT space.

]]> By: Alex http://www.aleablog.com/sergey-aleynikov-idiotic-moron/#comment-3324 Alex Mon, 13 Jul 2009 22:36:56 +0000 http://www.aleablog.com/?p=4003#comment-3324 The part I do not quite understand is how some other firm would be able to properly utilize this code. I assume front running involves before the fact knowledge of orders, not detecting after the fact patterns in executed orders. According to the stats, GS is responsible for 40% of the program trading activity, so it can front run against its own clients. Who else has access to that large a body of order executions? How do the ‘markets’ get manipulated? So, is this a smoke screen to lock down the code as it will reveal something different about its purposes? Theft of IP shows GS has been harmed and justifies preventive actions - why the need to warn about the possibility of a financial WMD? http://beaconintegration.com The part I do not quite understand is how some other firm would be able to properly utilize this code. I assume front running involves before the fact knowledge of orders, not detecting after the fact patterns in executed orders.

According to the stats, GS is responsible for 40% of the program trading activity, so it can front run against its own clients. Who else has access to that large a body of order executions? How do the ‘markets’ get manipulated?

So, is this a smoke screen to lock down the code as it will reveal something different about its purposes? Theft of IP shows GS has been harmed and justifies preventive actions – why the need to warn about the possibility of a financial WMD?

http://beaconintegration.com

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