Re:High Frequency Trading Strategies
by lordnacho on Monday June 01, 2015 @01:23PM
(#9640431)
There's a fairly big question of what human capital comes along with this. You will need some guys who are good at low latency programming.
Some strategies that I've seen also depend on having good agreements with brokers, ie you may see an opportunity in the data, but the costs of trading tip you into the red if your guy is margining you in a different way. I don't know what Lime et al charge you, but they aren't a likely name among the people I know.
There's also a question about what exactly you'll be doing in those markets. There are guys who make money market making options over the phone, without relying on colo for anything. Sometimes they'll have a quote machine that needs to be quick to pull, but they don't see it as anything other than a bit of extra money. Other options guys are totally different, relying entirely on speed to make their dough.
Also keep in mind you are only competing with HFT in as far as what you're doing is similar, ie there's a high chance you'll both want to grab the same trade.
Some strategies that I've seen also depend on having good agreements with brokers, ie you may see an opportunity in the data, but the costs of trading tip you into the red if your guy is margining you in a different way. I don't know what Lime et al charge you, but they aren't a likely name among the people I know.
There's also a question about what exactly you'll be doing in those markets. There are guys who make money market making options over the phone, without relying on colo for anything. Sometimes they'll have a quote machine that needs to be quick to pull, but they don't see it as anything other than a bit of extra money. Other options guys are totally different, relying entirely on speed to make their dough.
Also keep in mind you are only competing with HFT in as far as what you're doing is similar, ie there's a high chance you'll both want to grab the same trade.