Trading Financial markets : Dutch Speed-Trader Turns to Currencies After Conquering ETFs

Long, short, Bitcoin, forex - Plenty of alternate market disuccsion.
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Euler
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Wed Jun 14, 2017 8:34 pm

The bottom shelf of the fridge is laden with Heineken and Corona. The Corona is on rotation, but the Heineken is a permanent fixture: This is Amsterdam. A few strides away there’s a dark, well-stocked in-house pub.

Up one flight of stairs, the atmosphere is very different. Behind a door that can only be opened with a security pass is by far the largest trading floor for exchange-traded funds in Europe. The 110 traders here, along with 30 colleagues in offices elsewhere, traded €640 billion ($719 billion) in ETFs last year and at least that much in futures, commodities, bonds, stocks, and foreign ­exchange.

The trading volumes are those of a major Wall Street bank, but the refrigerator—and especially the pub, with its arcade games, pool table, and giant television—is pure startup. This isn’t an ­investment bank; this is Flow Traders NV, one of the world’s most successful algorithmic trading firms.

https://www.bloomberg.com/news/features ... ium=social

cybernet69

Wed Jun 14, 2017 9:46 pm

34 months without a loss. :o

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ShaunWhite
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Wed Jun 14, 2017 10:15 pm

It's all very clever, but as these and others get bigger and better they are risking macroeconomic side effects related to money supply and potentially causing deflationary pressure (and with it the risk of increased borrowing costs and slower economic growth). Sounds far fetched but so would this story 20yrs ago, what will the next 20yrs have in store?

QE necessary since 2008 to prevent deflation:
US Federal Reserve - $3.7 trillion.
UK - (£425bn) $540bn
Eurozone - $600bn

..almost $5 trillion, excluding the RoW numbers.

In the shorter term, while our pension funds (private and state) are trying to make a decent return, these hi-speed light-fingered pick-pockets are stealing all the cream.

Before I'm shot down, this isn't opinion, it's basic economics.

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ShaunWhite
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Wed Jun 14, 2017 10:18 pm

cybernet69 wrote:
Wed Jun 14, 2017 9:46 pm
34 months without a loss. :o
A month is about a squillion transactions so you'd expect the edge to be showing +ve over a month :) They probably had some pretty bad individual milliseconds though.

cybernet69

Wed Jun 14, 2017 10:19 pm

ShaunWhite wrote:
Wed Jun 14, 2017 10:18 pm
cybernet69 wrote:
Wed Jun 14, 2017 9:46 pm
34 months without a loss. :o
A month is about a squillion transactions so you'd expect the edge to be showing +ve over a month :) They probably had some pretty bad individual milliseconds though.
I cant go 34 minutes without a loss. :roll:

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marksmeets302
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Thu Jun 15, 2017 7:58 am

I build the software there :-) Well, by now there's probably no code made by me left because it has all been cleaned up and improved by people that are a lot smarter than me. But I did initiate all of their trading software. Worked there for about 12 years. In all that time I think we had about 5 or 6 loss days. The company is a money printing machine like you have never seen before.

cybernet69

Thu Jun 15, 2017 9:23 am

marksmeets302 wrote:
Thu Jun 15, 2017 7:58 am
I build the software there :-) Well, by now there's probably no code made by me left because it has all been cleaned up and improved by people that are a lot smarter than me. But I did initiate all of their trading software. Worked there for about 12 years. In all that time I think we had about 5 or 6 loss days. The company is a money printing machine like you have never seen before.
Can you post the algorithm's they use please ? :roll:

Bluesky
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Thu Jun 15, 2017 9:52 am

I have no idea what these guys are doing and 38 months without a single losing day sounds absolutely amazing.

The problem I have with these kinds of organisations is that the financial industry over the years has lots of instances of individuals and companies that have made spectacular returns for a long period of time then all of a sudden one of the following things happens:-

1. An extremely rare event takes place (the black swan effect) that virtually nobody could predict and the company or individual who had made the spectacular returns is ruined almost over night.

2. The spectacular returns are actually illusory and a massive con has been taking place. The auditors of the company were lied to and usually aren't as smart as the people pulling off the con. Eventually either a whistle blower emerges or whispers start to swirl and investors begin to withdraw their money and the fraud is brought out into the day light.

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Euler
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Thu Jun 15, 2017 11:20 am

marksmeets302 wrote:
Thu Jun 15, 2017 7:58 am
I build the software there :-) Well, by now there's probably no code made by me left because it has all been cleaned up and improved by people that are a lot smarter than me. But I did initiate all of their trading software. Worked there for about 12 years. In all that time I think we had about 5 or 6 loss days. The company is a money printing machine like you have never seen before.
When I saw the location I thought of you and wondered if you were familiar with them in some way. I'll be heading over to Amsterdam at some point for a visit this year. I'll let you know when I'm planning on heading over.

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marksmeets302
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Thu Jun 15, 2017 11:25 am

Bluesky wrote:
Thu Jun 15, 2017 9:52 am
I have no idea what these guys are doing and 38 months without a single losing day sounds absolutely amazing.

The problem I have with these kinds of organisations is that the financial industry over the years has lots of instances of individuals and companies that have made spectacular returns for a long period of time then all of a sudden one of the following things happens:-

1. An extremely rare event takes place (the black swan effect) that virtually nobody could predict and the company or individual who had made the spectacular returns is ruined almost over night.

2. The spectacular returns are actually illusory and a massive con has been taking place. The auditors of the company were lied to and usually aren't as smart as the people pulling off the con. Eventually either a whistle blower emerges or whispers start to swirl and investors begin to withdraw their money and the fraud is brought out into the day light.
It's a publicly traded company, fully transparent. Nothing fancy going on, just straight up arbitrage. Let's say you have a stock like unilever, listed on many exchanges for instance euronext, lse and nyse. Many times a day there will be short moments where you can buy the stock in one place and immediately sell it for a very small profit at another exchange. If you have low costs and are quick this is something worthwhile. Of course there are risks involved, all very well documented in the prospectus when they went public. As for (2): no way. As for (1): yes it is possible, but everybody there is scared of another Knight Capital event. They realize that everybody is focused to the max all day long, but sooner or later somebody will fuck up. That's why all operations are structured in such a way that no oversight can lead to a big problem. But still... :-)

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