Market Data Firm Spots the Tracks of Bizarre Robot Trading 483
jamie spotted a fascinating story at The Atlantic about "mysterious and possibly nefarious trading algorithms [that] are operating every minute of every day in" the stock market:
"Unknown entities for unknown reasons are sending thousands of orders a second through the electronic stock exchanges with no intent to actually trade. Often, the buy or sell prices that they are offering are so far from the market price that there's no way they'd ever be part of a trade. The bots sketch out odd patterns with their orders, leaving patterns in the data that are largely invisible to market participants."
Spotting the behavior of these bots was possible by looking at much finer time slices than casual traders ever see — cool detective work, but as the story points out, discovering it is just the beginning: "[W]e're witnessing a market phenomenon that is not easily explained. And it's really bizarre."
Secret messages (Score:5, Funny)
The machine intelligences are communicating through hidden channels in our global network.
Judgement Day is close.
Nothing to be concerned with... (Score:5, Funny)
... it's just SkyNet looking after its retirement holdings.
Re:Nothing to be concerned with... (Score:5, Funny)
"It becomes self-aware at 2:14 a.m. Eastern time, August 29th. By 3:44 am, it has a comfortable nest-egg and is on track to retire early, perhaps with a nice condo in Hernando, Florida."
Re:Here's an explanation for you: (Score:2, Funny)
They are not trading, they are training. If there wasn't already a legit seeming FPGA industry serving HF traders they would have needed to create one to cover their tracks after they discovered the Pyramid Inch.
Don't worry. Devaluing the markets is a net positive. If they build skynet we will be sure to flush to algos to the FOSS community.
Or maybe I am high and living in my parent's basement. Why is reality so complicated?
Re:Wow, that's better (Score:5, Funny)
If you hold a stock for more than a few microseconds, you're labeled a "f*cking camper" now.
Re:Nothing to be concerned with... (Score:5, Funny)
Re:I mostly agree! But let's soften it a little. (Score:3, Funny)
The only think the house has to watch out for is angry gamblers burning the casino to the ground.
Re:It's all about the Candlesticks Jack (Score:5, Funny)
They're obviously designed to manipulate trading volume in order to fuck with the church of technical analysis believers.
Scientology makes more sense than the ridiculous nonsense that is technical analysis.
"We have here a classic head and shoulders pattern as CSCO is showing support at 23 and some resistance at 25. I'm looking for a breakout once 25 is tested for the third time with momentum in a birthday cake trend over the next four periods..."
Re:Nope, it's right on (Score:4, Funny)
Holy shit. It's like ebay snipping but with real money!
Re:I mostly agree! But let's soften it a little. (Score:5, Funny)
Yes, because $1.5E12 deficits are not a problem.
You are welcome to bet against the US repaying all its debts on time and as promised. That's the beauty of the stock market -- for every position there is a counter position betting on the opposite result. What's more, the contrarian that is right makes huge profits. Given that the US Treasury has no problem auctioning off large batches of US securities at crazy-low interest rates, there are lot of people quite confident in that full and on-time repayment so you stand to make a mint if you bet against them and are correct.
$20 says you aren't going to put your money where you mouth is though.
Isn't it Obvious? (Score:3, Funny)
What's the matter with you people? Back in the day, Slashdotters would have figured this out immediately.
It's the *terrorists* using the bid data as an out-of-band *communication protocol* for transmitting *encrypted messages*! Remember? Like they were doing with steganography in eBay auction photos? The brilliance is they are using our own tools against us!
Bear with me a moment, pour yourself a large frosty mug o' xenophobia, and think about all those *overseas programmers* in the financial industry. Why, if we don't stop them, they'll probably code up some *derivative bots* that will f-up the mortgage industry!