How I made $500k with machine learning and high frequency trading

Re:How I made $500k with machine learning and high frequency... by white_devil on Wednesday November 07, 2012 @03:07AM (#4752678)

It's always the same bullshit excuse: "providing liquidity". It's just that you pretty much need to be another HFT bot to partake in that liquidity.

[ Parent | on HN ]

Re:How I made $500k with machine learning and high frequency... by lrem on Wednesday November 07, 2012 @07:29AM (#4753150)

From what I understood, this contribution is not about making stuff nanoseconds faster, but about how this pushes spreads down. Anyone doing any trading will be happier to see the spreads smaller, wouldn't he?

Note: by spreads I mean the difference between buy and sell prices. I don't know if there is a special word for it in this context.

[ Parent | on HN ]

Re:How I made $500k with machine learning and high frequency... by AnIrishDuck on Wednesday November 07, 2012 @11:13AM (#4753848)

Exactly. HFT reduces counterparty risk for market makers (because with HFT, it's much more likely that there will be a counterparty for any given trade). This enables the market makers to reduce their bid-ask spreads; the profit from the bid-ask spread is what covers the risk a market maker faces from their market clearing obligations.

[ Parent | on HN ]

Re:How I made $500k with machine learning and high frequency... by mcguire on Wednesday November 07, 2012 @12:54PM (#4754363)

Do you know of any data on the size of the spreads over time?

[ Parent | on HN ]