Hope, FPGA’s, High Frequency Trading and the New Market Access Rules for quant development
Hope FPGSa High Frequency Trading and the new Market Access Rules
I recently became aware of an emerging practice most likely being implemented by clearing companies at the low end of the capitalization sprectrum offering a…
While it could be a somewhat rude implementation, I can’t really see the reason to be upset about it. In my opinion every trading venue should have flow control, algos can go out of control regardless if an FPGA is scrambling the data or not. If the software/hardware of the trading venue can’t handle this, it’s time to get something better, and if it’s OTC trading, then both parties can agree if the solution is acceptable or not.
If there is a real need for this type of design, then perhaps the proper solution would be to include fields in FIX that are easy to manipulate for the FPGA, some kind of ‘reject this message’ flag. and the HFT can get signals back that they are out of limit rather than thinking there is some kind of encoding error and the HFT box can take proper actions.
if it’s indeed fiddling with messages and forwarding them without any notification or approval from client that’s bad (also kind of understand know why DB wanted FPGA developers…) those morons probably don’t getting how much damage it can cause and how much they probably needed to pay for it, they probably made a trap for themselves…
Message alteration is the cheap way of doing FPGA risk management and not a long term solution as exchanges will catch-on and stop this practice by either charging for the rejects or simply not certifying the products that work this way. The real solution is to have true risk management and control through the FPGA that can perform the rejects (and have a GUI give the reason for the reject) rather than malforming the message and letting the venue “deal with it”. Fixnetix’s iX-eCute FPGA was engineered properly and will reject orders when needed without sending a corrupted message downstream.
NOTE I now post my TRADING ALERTS into my personal FACEBOOK ACCOUNT and TWITTER. Don't worry as I don't post stupid cat videos or what I eat!