Wall St. Trading Servers To Power Off-Hour Clouds? 208
miller60 writes "As cloud computing gains traction, some Wall Street firms running armadas of servers to power high-frequency trading operations are contemplating leasing out their excess computing capacity after the trading day ends at 4 p.m. 'Once 4:30 rolls around, we don't need those machines,' said one CTO of a market data firm. 'There may be an opportunity there.' A similar revelation led to the creation of the cloud computing operation at Amazon.com, which built its infrastructure to handle peak Christmas-season loads that lasted just a few weeks each year."
Is This Secure? (Score:5, Interesting)
Not a new idea... (Score:5, Interesting)
Compuserve was founded by a life insurance company to make a consumer service run on their business systems with the expectation that the consumers would use it during non-working hours.
When it comes down to it, nobody needs their clock cycles 24/7 at even load, even though that's what computers are designed to do. Shared services for the win!
Re:Is This Secure? (Score:2, Interesting)
Is letting 'cloud users' access the servers that run out financial markets really a good idea?
No.
Re:Get rid of them entirely (Score:4, Interesting)
Re:So what they are saying is (Score:5, Interesting)
In fact, with after hours trading and foreign markets, it really does run 24/7, just not on the floor of the NYSE (and not as liquid).
I would posit that a good reason for this might be that the stock market is already panicky enough and being closed for most of the 24 hour day gives people a little more time to thing about what is going on. A perfect example is companies that release earnings and other important news after the closing bell. It gives people time to process the information rather than giving the fastest guy a chance to make a quick profit. For the *real* purpose of the stock exchange, it does not need to be open. If your goal is to raise capital for a business (or invest in one) rather than speculate and day-trade, the current market hours are just fine.
destroy them (Score:5, Interesting)
I dream that this entire high frequency scam is declared illegal and all involved are placed where they belong with all of their property confiscated.
Here is what happens when HFT is done: 2 parties agree on a price, the HFT meddles with in a way, that takes out money from the transaction, so the buyer sells lower and the seller buys higher. That little bit of difference is stolen by HFT.
These are thieves, we are discussing here, understand that. So they found a way to make some profit on their infrastructure? Well, great for them. 4,000,000 transactions per second they are talking about for one shop. That's 4,000,000 thefts per second.
Re:"Once 4:30 rolls around..." (Score:5, Interesting)
Believe it or not, trading by computer has now become so quick that companies vie for server space closer and closer to the place where trades are taking place. This article" even goes as far as suggesting that a 1 millisecond advantage in trading applications can be worth $100 million a year to a major brokerage firm with such low-latency trading becoming more common. [datacenterknowledge.com]
I think the ping to Asia may be a bit more than that!
Re:Get rid of them entirely (Score:2, Interesting)
Not really. Someone has to quote a bid and an ask all day long, quickly so you get your shares when you want. And with competition between high frequency players trying to extract a spread or rebate, you get some pretty tight spreads giving you a good execution price without you having to pay the hidden cost of the spread. Most heavy volume stocks are a penny wide.
Second, no one can "siphon off" money without taking a risk. Prices moving don't imply "free money" for the taking and there is substantial risk involved. No one in the market gets compensated for zero risk. It's like any other business where people take risks with their capital to provide you with a service. In this case, that service is providing you with liquidity.
Re:destroy them (Score:4, Interesting)
so the buyer sells lower and the seller buys higher.
- a typo obviously. Buyer buys higher and seller sells lower than anticipated. The HFT transaction takes the edges. There is no value for economy other than the bank account of the HFT transaction owner becomes bigger. They didn't care about what was bought, what was sold, they have no idea what is happening with what is bought/sold, they are taking money from participants who may, in theory, have done something productive with it. Of-course that's not what happens. Just understand, that many people who own mutual funds and other investments are the suckers in this game of stealing the penny from the 'tray for everyone', to put in Office Space terms, so that /. would understand.
Re:Get rid of them entirely (Score:5, Interesting)
Exactly this. High frequency trading really perverts what the markets are for. Make a law that you have to hold a stock for at least a day (maybe even just an hour would work) and you might restore some sanity to the market as well as giving those traders who don't have server farms running advanced trading algorithms a fighting chance.
You'd only have to slow them down by a second (literally 1 second) to completely bring their business model to a halt.
HFTs buy zero second data feeds from an exchange and some exchanges actually sell pre-zero-sec access.
Meaning that the HFTs can see trades a few hundred milliseconds before they post, allowing the trader to sneak in and buy/sell.
The SEC is looking to ban the practice, but hasn't gotten around to doing so yet.
Re:EC2 is because of christmas servers? (Score:2, Interesting)
Can someone post a source for the claim that Amazon did EC2 because of Christmas time servers that are no longer in use during the year?
You'll probably get sources, as Amazon said so initially. Of course that's best forgotten now as it has become an inconvenient fact.
Notice how every Christmas their servers go down due to mysterious "hackers" poisoning their DNS server or what not. Every year - a different excuse, and every time - around Christmas.
Basically, don't use Amazon if you have mission critical processing around Christmas, or even worse, if you expect a peak around Christmas.
Re:Get rid of them entirely (Score:3, Interesting)
Make a law that you have to hold a stock for at least a day
That's an interesting idea. But it's obviously flawed. Let's say i buy some pharma stock at 9am. At 12 pm the FDA announces that they have found that pharma's main product to be dangerous. Should I not be allowed to sell?
I would argue that derivative speculation and complicated leveraging packages are what make the market insane.
Other people [bloggingstocks.com] have made similar [bizcentral.org] comments.
Re:Is This Secure? (Score:3, Interesting)
IANASA*, but wouldn't putting the data servers (DB servers?) in separate machines and physically disconnecting the power before allowing access to the other machines be enough?
* I Am Not A Sys Admin
It Depends... (Score:3, Interesting)
1. The computers contain NO mass storage at all.
2. The mass storage is external to the computer and is disconnected from the computer during cloud computing.
3. The computer is rebooted from CD (or DVD) before and after cloud computing.
Of course, the odds on those constraints being met are pretty low if non-technical types are involved.