The point of this piece is not to generate outrage; the author is not bothered by this, nor does he think the reader should be. The point of the piece is that this is interesting. It's a sign of how our economy in general, and stock trading specifically, is changing.

To me, the most interesting part is that eventually, how we interpret the laws about what publicly traded companies can legally say may change.

I'm sorry, I found the article extremely interesting and I didn't mean to infer otherwise. More than anything I just wanted to say "good riddance" to those companies but I quite enjoyed the article and the topic.

Corporations have free speech but comedy is banned?

>come on, put out your fake press releases at 4:05, not 3:55. There is no reason to tempt fate, or annoy your shareholder-algorithms, like this.

Looks like the author is bothered by this.

He also adds:

"I think that materiality means what it says, and if people or algorithms do dumb things with trivial information that's their problem."

That was his interpretation of a possible SEC ruling

Let's hope the SEC has more humor than stock trading bots.

Tesla was singled out because unlike other companies, the joke was a press release picked up by trading algorithms, and also at 3:55pm. It was possible to measure the effect, unlike Amazon's home page redesign.

I'm guessing Tesla told their PR agency to release it at 4:00, after market close, but the person pushing the button didn't realize the significance of that time and figured early was better than late. oops.

I would sincerely hope that a PR agency would understand the significance of market close. If not, I sure don't want them handling my earnings releases (or anything else).

There is after-hours trading anyway...

Humor may be a great way for humans to battle newsbots and computer traders.

This could make for a novel CAPTCHA technique. "Choose the joke in the following options."

That would be interesting. The use of sarcaasm also seems to be a great way to foil these algorithms.

SarCaptcha:

1) This is a sentence.

2) This captcha is on this page.

3) This captcha is super awesome.

Autistics would fail this, no?

They're not real people anyway. [/sarcasm]

I've seen "choose the absurdity" before.

I don't get it. Knock knock...

One thing that I wondered about with automated trading was whether it might make sense to have a rate-limited marketplace. Somewhere that caches trades received over a given time period and then executes them 'simultaneously' (or at least without preference for the order they were received in)....

I'd love to see a stock market with a call auction every 15th min 24/7. It just doesn't make sense to have no trading at all during weekends and then claim that sub-millisecond execution is necessary when the market is open. The risk for the market maker shouldn't be much higher but the resources required to provide liquidity are much lower (no need to hire lots of developers to optimize your code). I wouldn't be surprised if a market like that would have tighter spreads (since it's cheaper to act as a market maker) but better stability (since an algorithm screwing up can be stopped during the 15 min interval).

There are actually academic findings that would make you think that is true. Unfortunately, those findings didn't take into account venue arbitrage, carry risk, or fees.

Interesting! Do you have any link where I can read more about it?

Sure:

http://faculty.chicagobooth.edu/eric.budish/research/HFT-Fre...

Note that this doesn't deal with the distributed systems problems of multiple exchanges so would require a universal exchange monopoly (ie an impossible and unwanted condition).

There are exchanges with batch auctions or batch auction time periods. They don't prevent algorithmic shenanigans in practice, they are some of the most gamed exchanges there are.

Batch auctions in and of themselves do not mitigate latency advantage because the people that propose them never remember 2 things:

1) venue arbitrage - not only does the exchange have to batch all the trades on its book, it has to coordinate that with all the other exchanges.

2) tiebreakers - if in a given auction you have more people on 1 side of a price than on the other (more people offering to buy at x than people willing to sell for instance) who gets to trade?

That is similar to some of the sensible suggestions to reduce the front running gains high frequency traders extract from the market. I can't remember the details but even just pooling them by the second or something like that.

A great deal of effort is currently being expended to algorithmically detect sarcasm, its a real problem.

When I read this my only thought is that algorithms aren't good enough yet. Fundamentally I see no reasons why 99% of brokers and human traders can't be replaced with algorithms.