Right, and you also should just vote and be happy with the result. Wait, what I actually meant to say was: Read https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393351599 for some insight on how rigged this was already in 2015 and before then.
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Right, and you also should just vote and be happy with the result. Wait, what I actually meant to say was: Read https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393351599 for some insight on how rigged this was already in 2015 and before then.
Yes, market makers are a real thing. When options open up for a particular security, none of them actually exist yet. Suppose I'm the first person who wants to buy a September 2019 $435 TSLA call... who would I buy it off? The market maker would have specified an ask price based on the stock price, time, volatility, etc, and when I place a bid they will write the contract to sell it to me. I think (but not expert here) that many of the big brokerage houses act as market makers.
Some care probably are technically inventory cars, but not in the usual sense. Optimization may include building cars that will be ordered in the next week or two, even while there have many cars in the order queue.
This happens with the S/X, but on a much smaller scale. Occasionally someone gets a vehicle very fast because Tesla built it before they ordered. This allows Tesla to smooth S/X production to 2000/week. Cars immediately not sold as new become loaners for a bit. This is a much more profitable way to run a factory rather than simple build to order.
This is standard operations research modeling using linear programing. A claim that "Tesla is making cars they haven't sold" is from either ignorance or malice. Tesla would be incompetent if they weren't mathematically optimizing production.
generally brokerage and market making are separate business entities, separate functions, subject to separate sets of regulations. unless you’re referring to crossing customer orders or “internalization” of orders
but that isn’t the point anyway. i think we’re talking about order and execution and everything that can happen in between.
what happens with your order is not so simple and depends on your broker really.
your orders;
this doc is a pretty good summary;
SEC.gov | Trade Execution:
in my search i actually found this (dated a couple years now) pdf about how interactive brokers does it. note, they don’t sell order flow. but reading this document youll find other market practices that are out there, and deduce what some other brokers do. and it has some deeper detail https://gdcdyn.interactivebrokers.c...rmSampleView?ad=order_routing_disclosure.html
lots of factors determine order routing, including maker-taker rules for liquidity makers/takers What Maker-Taker Fees Mean to You
so yes @brantse, @ggr it’s possible you can get hosed, if that’s what you were alluding to, but generally not too bad compared to pre-electronic trading.
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Apologies for the digression, but this kind of caching (worst case of 3500 cars) is also what is used to prevent typical scratches on an audio CD from becoming audible: You find a big rectangle, and fill in rows of bits/cars and take them out by the column. A whole sequence of damaged bits on the audio CD thus gets spread out, see Burst error-correcting code - Wikipedia
(For a data CD, where no errors can be tolerated a simpler error-correcting code has to be added.)
PS. Please enlighten me, does the combination of red and Michigan refer to some joke?
Yeah but they are all already on clearance sale. Even car dealers have trouble selling dreck.
And what about the Bolt? I have seen one once. It looked just like every other small GM hatchback, but it is available.
I’m a professional HFT trader. This book is complete BS. Michael Lewis was manipulated by the IEX founder to market his exchange.
Professional HFTs do not manipulate the market, we are highly quantitative and generally take small positions. The manipulators are manual traders trading on screens. I know the two most famous ones by name, as they are part of the lore of the industry (search Igor of 3red).
We bring the bid/ask spread down to minimal levels and are a net benefit for retail investors, but much like Tesla, we have disrupted incumbents who seek to publicly deride us for their own benefit.
IDK, it was about that time that I worked at a HPC manufacturer and we sure built a lot of expensive low latency networks connected clusters for traders that sounded just like the flash-boys story, trying to get ahead of the trade by being faster a few milliseconds and doing basically what I would call insider trading by getting their clusters as close as possible to the exchange with fibre optics etc.
The need for speed is due to competition. Generally being at the front of a price level is profitable while being at the back is not. Many models have similar signals so the fastest to execute will be profitable and the slowest players will be starved. Basic latency arbitrage existed in the early days but those opportunities are completely gone. You would not believe how incredibly efficient markets are in short time scales.
bdy0627
Active Member
Speaking of manipulation, I'm halfway through the book Black Edge, which is about insider trading in the hedge fund industry, and SAC in particular. Pretty interesting read. Hedge funds have lots of money and want to make lots of money. If there's an edge available, legal or otherwise, they will find it.
Krugerrand
Meow
OMG! Somebody screen shot this puppy and repost it in January so we can have a good ‘remember when...’ laugh.
i disagreed with first post because the book did have some accuracy as far as the points on the need for speed - which you ended up eluding to in your second post anyway, and which @Skryll mentioned as well. i know network engineers that related intimately with certain parts of the book.
im sure we’d agree not every trader is the same as not every HFT is the same as MM etc etc.
but i also i agree with you for the most part that hfts have been spun in a negtive light. i imagine its bc you helped put a lot of market makers out of business, and they didn’t go down quietly. their argument was hfts aren’t subject to same regulations as MMs, but they reap all the benefits, mainly bc they must continuously quote while hfts can walk away in bad conditions while MMs get hammered. in some ways i guess MMs can be considered the original form of high frq trading. i have no opinion on this, regardless, just saying what i’ve read and seen.
but my question is if someone can manipulate a market manually, then why couldn’t they do same with high frequency algos as well? based upon the speed and efficiency argument, that would imply they would be able to generate even more impact, or at least do it much more efficiently.
while your shop may not do the negative things that been associated with hft’s in the press, it’s def possible that some can/do.
i looked up the igor thing...
ahh they were spoofing and got caught
thanks for tip!
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Of course you can. But look at the open interest for
TSLA180803C00245000
which is at this instant 0. And yet I am sure I could buy or sell one. That's because a market maker steps in and creates the other end of the transaction.
Can someone remind me what gross margin for bare bone 35K model?
Also looks like there are many who really want the 35K base (just battery EV), no extras/ no frills .. so at what volume 7K/week -10k/wk would it make sense for going after the 35K market.
Just a thought, the 35K could come in 2 flavors.
i. 35K with no extra features ... remove the cameras, etc and just give low end market what they want
ii. 35K+ with camera etc, but all features turned off with option to upgrade in future ...
Also one thing no one is talking about .. but I think when the Tesla killer does really arrive in volume, TSLA could unleash the 35K in mass volume (this is the reverse of scenario JP Morgan describes ...)
week end OT .. have at it ...
Also looks like there are many who really want the 35K base (just battery EV), no extras/ no frills .. so at what volume 7K/week -10k/wk would it make sense for going after the 35K market.
Just a thought, the 35K could come in 2 flavors.
i. 35K with no extra features ... remove the cameras, etc and just give low end market what they want
ii. 35K+ with camera etc, but all features turned off with option to upgrade in future ...
Also one thing no one is talking about .. but I think when the Tesla killer does really arrive in volume, TSLA could unleash the 35K in mass volume (this is the reverse of scenario JP Morgan describes ...)
week end OT .. have at it ...
Krugerrand
Meow
Munro said double digits GM for 35k model. Not sure Tesla has ever said GM for the various trims but rather just an overall GM. And that number escapes me. 25-28%?
And for the love of chocolate, there will never be a Tesla killer as long as JB and Elon walk this planet.
No way they make a model 3 without cameras. They provide a huge advantage to Tesla even if they aren't turned on by the customer.
Tesla will start making the 35k version as soon as they don't have a backlog of old reservations that want a higher config vehicle. They still are making cars for line waiters that want P or D.
I'm guessing 10% margin on 35k base model.
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