Tag: high frequency trading

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Democracy and Sharks!

// Posted by on 06/04/2015 (3:32 PM)


What the readings this week left me with is this:

  1. Clearly, we’re trying to move money and move it fast. These processes help make more money. It might be legal, it might not be, and some

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What the readings this week left me with is this:

  1. Clearly, we’re trying to move money and move it fast. These processes help make more money. It might be legal, it might not be, and some people have developed algorithms to manipulate it. Pretty simple, well, not really, but you know what I mean.
  2. More importantly, I think, access to the internet and all things digital and fast does not necessarily build or promote democracy.


 The Internet is designed for collaboration and the promotion of ideas. As long as people are able to access the Internet, they will have a greater possibility of locating like-minded people. When like-minded people collaborate, they develop new ideas and they begin to question things. If they can’t find a logical answer they begin to question those that made the decision, ruling, law, etc. in the first place. If those decision-makers won’t make change, then that group of like-minded people will organize and work to force change. Decision-makers and leaders don’t like this. It puts their power at risk. It calls their authority into question. The Internet definitely gives power to the general public. Power to the people!


The ability to organize and make change is power and the Internet is absolutely a tool for this to happen. The ability to then force our leaders to make change, and if they don’t we vote them out of office, that’s power.

But wait!

The Electronic Frontier Foundation made note that Venezuelans working with several different ISPs lost all connectivity on Thursday of this past week. Users lost connectivity to the major content delivery network Edgecast and the IP address which provides access to Twitter’s image hosting service while another block stopped Venezuelan access to the text-based site Pastebin.

Meanwhile the New York Times reports that the news network NTN24 has been shut down as well. The alternative news channel Telesur, run by the Venezuelan government, is still up and running.

NTN24 has been shut down, according to the president of Venezuela, due to their attempt to “torment anxiety about a coup d’etat.  The President Maduro went on to suggest that “no one is going to come from abroad and try to perturb  the psychological climate of Venezuela.” NTN24 was removed on Wednesday of this past week. (“Venezuelan government shuts down internet in wake of protests“)

The government, big business, and many other powerful and authoritative entities have the same access, if not more, to the Internet as that group of like-minded people that rose up for change. Basically, if they didn’t like that the aforementioned group organized and questioned their power, they have the power to take it away. If there’s no internet, people can’t share ideas, ask questions, or continue to organize. They could target individuals, spy on them, steal their identities, or even make it so their cats no longer recognize them.

The Internet empowers everyone who has access, but don’t use your access to do anything questioning those that gave you access. They’ve been empowered too, and odds are they have even more power and even more internet. David Golumbia states in his article, “High-frequency trading: networks of wealth and the concentration of power,” that “many of the most powerful actors in our world show absolutely no signs of being afraid  of losing their grip on power due to computerization.” This isn’t a redistribution of access or power, but rather the already powerful are sharing just a tiny bit – just enough to keep from asking questions. The powerful have tried to oppress print and television in the same way – either by shutting it down altogether, or by entirely dictating what those mediums are allowed to present to the public.

So no, the Internet is not democratic. It’s a tool that we’ve been given to use, and if we don’t use it right it will be used against us. Golumbia says that “people themselves must reassert their right and their responsibility to govern and operate the parts of society that are and should be democratized.”

Oh! I almost forgot!

3. Sharks! I can’t forget the sharks. It’s crazy to think that these companies are pouring all of this money into establishing this infrastructure only to have the sharks come and play with it. It’s like a squirrel biting a power line. Is it possible to mask this electromagnetic field? I don’t know enough about this stuff to speculate. If sharks get angry at humans and decide to take out the internet, or any of the other fiber optic cables running along the ocean floor, we’re in the dark and they’ll have ample time to devise their takeover. This is power! It seems that access to the internet and the expansion of digital technology really does empower anything and everyone.

Today’s lesson: don’t piss off the sharks.


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Spring loading is Leading the Existence of Dark Pool Markets

// Posted by on 04/06/2014 (6:15 PM)

When looking at the world around us today we use patterns and formulas for most of our activities. From knowing the exact process at a fast food restaurant to checking the weather these formulas have been created and implemented to… Read more


When looking at the world around us today we use patterns and formulas for most of our activities. From knowing the exact process at a fast food restaurant to checking the weather these formulas have been created and implemented to make our lives efficient and more useful. The question that is posed in Rushkoff’s blog Present Shock is, are all these processes and mechanization always right? Isn’t it possible that the algorithms could fail and that we cause more harm than good with the way we have relied on them to such an intense extreme. In Present Shock Rushkoff details an example of this.

“A stock market  driven by algorithms is all fine and well until the market inexplicably loses 1,000 points in a minute thanks to what is now called a flash crash.”

This was exemplifying by using High Frequency Trading and the use of algorithms when predicting future share prices. While HFT trading is a huge source of revenue for companies such as BAT, when it fails it could also cripple the entire industry. These algorithms while they are useful and have predicted a huge number of stock trades many humans could not are still subject to failure and should not be followed blindly. When hearing about HFT stocks in the greater business community, for the most part there are no good things. Even in a clip from CNBC it talks about how HTF ‘s may lead to a misuse of information in a two-lane system of information. NY Attorney General Scheiderman argues that it is not within the law to allow a limited access of information to only those that can afford it. This goes hand in hand with the articles we read a month ago about how technology can only further increase this income gap through the lack of information or lack of access to key technological resources.

Another result of HFT and algothrithm spring loading are traders moving away from tradition stock forums and moving to the dark pools of Geneva or what has also been deemed dark markets. These markets will only cripple the broader market more and are said to be worse than simply high frequency trading. These dark pool markets reduce transparency and most of these venues lack integrity. This could result in a huge problem for the markets and for traditional traders. In an article from CNBC that say that “We have academic data now that suggest that, yes , in fact there is a point beyond which the level of dark trading for particular securities an really erode market quality.”

    Rushkoff states they have resort to a main strategy of avoiding spring loading situations altogether. This cause traders to lose the advantages of HFT’s trades but regain their sense of control over the market and apply their real world knowledge. However as Rushkoff states this as a solution I am also left without many answers and with many more questions. While it is all well and good to suggest avoiding HFT trades and apply your real knowledge what happens when this is unavoidable. It is certainly unavoidable to trade today without the presence of algorithms and future projections. How does Rushcoff legitimately suggest we avoid HFT’s trading short of entering dark markets, which are even more detrimental, then the existence of high frequency trading. These new forms of trading which have become more and more known are only going to strength with the passage of time and the increase in technology. Should we simply accept these forms or should we fight against them, which seems to be what a majority of the business world is doing today. Will we eventually succumb to these methods and accept them? If that happens we still have to be aware of always present risk that they might fail and that human intervention still needs to be at the forefront of our thinking. We cannot simply hand over our markets to these future algorithms and high frequency trading systems.

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