Re:Hedge Fund Wants to Use Atomic Clocks to Beat High-Speed ...
by beezle on Monday July 11, 2016 @12:22PM
(#12072129)
"As obvious as the idea seems in hindsight" And the "obvious" should not be patentable. And of note, this technique has been done before in the past in different market and theirs is only an adaptation to the current equity markets.
Re:Hedge Fund Wants to Use Atomic Clocks to Beat High-Speed ...
by nycdatasci on Monday July 11, 2016 @01:36PM
(#12072745)
I'm conflicted on whether or not a patent should have been granted. I've worked in equity execution for about a decade and do feel that this is novel.
On the other hand, this is a clear case of using the patent system to secure and persist an inefficiency in the market. It's hard to measure the cost of such an inefficiency to institutional investors (mutual funds, pensions, endowments, etc) but I suspect that it is well into the billions annually.
As obvious as the idea seems in hindsight, no one on the sell-side has a product like this right now. The closest thing is the Thor router, which is a crude attempt to accomplish the same feat because it doesn't address variation in latency. An algorithmic execution product like this would effectively end latency arbitrage, which is a source of RenTech's livelihood. To hedge against that, they have secured the IP rights to the technology.