Saturday, June 24, 2017

Selling stocks in the sandbox

One pit per stock, naturally.  We eliminate any intermediate supply chain, the corporate spreadsheet is a distribution with known precision, everything  round robin look at the balance sheet.

The issue is auto pricing to the same uncertainty as the trade book., which we guarantee by having all the buy and sell bots look at the stack before prices are crunched. The TU needs to be less than a quarter point, we need trade volume on the single stock, else the pit boss can get stuck paying for inside information.

In addition to volume, we need liquidity. All the prices are adjusted via a mandatory  margin account kept by all traders. So, two traders agree on price, by some other channel.  They report the event to the pit boss and interest swaps occur to rebalance.   This all depends on what? No flow, no quantization.

But,but... we still have risk profile at the secure elements, so low volume,micro stocks can be auto pitted, but trading bots pre-qualified to run wide of amber.

And, as always, when the pit boss becomes hysterical frightened, pull the jamming flag, cause a noticeable ledger fee.

What have I gained?

The buyer and seller do not want to worry the mechanics of the system, they want to be assured that all TU imposed in the system are fairly distributed.  Thus, buyers and sellers can trade stock based upon posted priced, and the congestion between their deal and the actual price is fairly paid for.

So, buyer and seller meet on the board, and click on the deal.  The next day, your margin account will show a slight adjustment, relative to the formal deal. The pit boss is  accounting for the cost (or gain) of defeating a string of HFT traders. Unknown to you, your trading bot has negotiated a bit, on your behalf. But it will be a well known and commonly used bot; deemed safe by  all.

No comments: