Found in 7 comments on Hacker News
px43 · 2021-05-30 · Original thread
IMO Google and Facebook have their hands remarkably clean relative to the rest of the Adtech industry.

I've heard some crazy shit about how much money comes from adtech to fund blackhat data brokers. Adtech buys hacked databases on underground markets, but more than that they fund supply chain attacks to get highly intrusive adware into popular apps. They frequently buy up applications that have a wide install base on phones and browser extensions, and then on the next update, request maximum privileges and use it to loot as much as they can from user systems.

It's a symbiotic relationship. Shady ad networks are often used by criminals for narrowly targeted attacks (advertise this crafted phishing site to women aged 25-35 in the greater Dallas Fort Worth area who are recently married). Those criminals use that access to obtain more private data which they sell to adtech companies. It's a pretty gross business.

In other news, HFT isn't bad because it's HFT, it's bad because order matching services have a bunch of shady, undocumented order types that are designed to allow HFT firms to specifically extract winnings from retail investors. They are absolutely economic parasites, and no one has any incentive to stop them.

https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393...

https://www.amazon.com/Dark-Pools-Machine-Traders-Rigging/dp...

paparush · 2020-10-26 · Original thread
Michael Lewis' "Flash Boys" is a great read on the subject of building the high speed trading networks. https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393...
mariodiana · 2020-05-17 · Original thread
HFT capitalizes on a kind of time arbitrage. They take the data from one market, and then transport that data using specialized, custom built networks that move the data from one place to another a tiny fraction of a second quicker than other networks. They then capitalize on having that data earlier to eek out small profits at scale.

Imagine two investors sitting at a restaurant table discussing trades they are about to make. The trades they are making will be significant, in the sense that their trades will then impact the value of the stocks they're trading. Meanwhile, a waiter at the restaurant makes a habit of eavesdropping on the conversations of these investors. When he gets the information, he runs to the phone and effects his own, smaller trade.

It's not that the waiter happened to overhear something. The waiter makes it his business to "overhear." The waiter adds no real value. He's a parasite on the people who do add value. The HFT traders are likewise.

What they do is documented in Michael Lewis's Flashboys.

https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393...

guiambros · 2018-09-11 · Original thread
It means they are handing over your transaction to HFTs, who can then see your transactions ahead of everyone, and buy the stock right before and then sell to you for a higher price. Imagine you just issued a BUY order at market price; they can buy at $99.9 and sell to you for $100, making a $0.01/stock profit. Rinse and repeat millions of times per day.

This is very similar to "front running" [1], but because a) this happens privately and in small quantities, and b) it is not necessarily privileged information, it's considered legal by the SEC. But it is highly questionable for sure.

"Flash Boys", by Michael Lewis [2] is a great read, and goes into detail on the world of high frequency traders, and how they operate.

[1] https://en.wikipedia.org/wiki/Front_running

[2] https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393...

davorb · 2016-06-24 · Original thread
> Maybe you can tell us something about their coding practices. A friend of mine who work at GS told me they have an absolutely massive ball of spaghetti that takes 7 hours to compile. That's for their trading systems.

In case no one with actual experience responds to you, you might want to check out Flash Boys[0], which spends a little time talking about GS's code. From what I've read in that book and in other places, what you heard seems to be the correct.

[0] https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393...

mhomde · 2015-01-14 · Original thread
The only reason why this is "illegal" and HFT is legal is that the HFT firms are paying customers of the exchange. It's really quite scary how complicit and front-runned the whole stocktrading business has become. I really recommend Flash Boys which is an interesting read on the topic

http://www.amazon.com/Flash-Boys-Wall-Street-Revolt-ebook/dp...

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