Jan

14

 I recently received a letter from an auctioneer stating that "I can see the screen if people are going to bid on the internet. We can see if they have the mouse over the bid button and are thinking about bidding. Like your trading robots, this is quite sophisticated these days for what you can do and see online, bidding from both sides".

Wow. If this is true on auctions that have a volume of 1 million tops, imagine the incentive and effort that could be put into seeing what the latent trades are in our field. I notice often in the bonds when I put my finger on a key, there is a move against me before I have put it down. But I have attributed it more to my paranoia about being front run by robots in the past rather than the type of cheating that apparently was routine in computerized poker games where the adversary was able to see your hand, "merely as a check on the level playing field".

It is hard enough to stay losing at a sustainable pace to the flexions who get info from the circular offices and the marbled steps of the hill, but one has a inimical aversion to having the robots take one to cleaners also. In Waitskin's book he describes how in his wrestling matches he and his Taiwanese opponent would react to each others thoughts and not movements, and I often wonder whether words or extraneous thoughts could have a negative influence on the rate of loss that one is entitled to have in trading. That's why I ban them in office.

Anonymous writes: 

Any trading interface that has the user queue up a trade, say in a popup window like — does, could easily send that fact up the line. The value of such data is obvious.

Jeff Watson writes: 

See, nothing changes. Back in the pit days, when the broker would look at his paper order, I would look at his eyes to see the direction they went which would indicate whether he was buying or selling. If he was buying and I wanted to sell at a little higher price, I might bid against him hoping for him to increase his bid so I could squeeze out an extra quarter cent. I also learned the skill of reading through paper, which was profitable. Detecting mouse moves, or detecting eye movement, it's all the same thing, the inside players always have an edge over everyone else, but as one might say, plus ça change, plus c'est la même chose.

Anatoly Veltman writes:

It reminds me of the good ol' days in the COMEX silver pit, where with the market down 5-10% on the session and the leverage of 30:1, a commission house runner would approach the crowded pit with a stack of tickets near the close. Like any smart local, salivating, I would chuckle "they ain't buy orders to be done…". As a matter of fact, the most famous story of all had a Merrill broker buried with paper yelling "at even!", and the local grabbing him by the collar gasping "what even??", and the broker spitting out "any even you want!!!"

The better approach yet took hold by the early January 1980, when Hunt Brothers and their followers went one way only, day after day: buy, buy, buy. Smart traders hired additional temp arb-clerks, whose only assignment for the day was to monitor the movements well off the trading pit: namely, at the WTC garage! As the floor broker, known to execute for Hunts, was about to roll into his parking spot at the exchange, the news of such a "silver moment" would be relayed upstairs and make waves around the world!


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